The German government agreed on Friday to bail out Uniper Energy UNPRF, the country's largest importer of gas and one of the largest utility companies in Europe.
What Happened: Due to the Russia-Ukraine War, oil supplies have been tight and expensive for the European Union. The Kremlin capped gas supplies at 40%, causing Uniper to send a bailout application to the German government.
Uniper has faced reduced deliveries from Russia, causing the company to accumulate losses of 6.2 billion euros or $6.3 billion dollars, Reuters reported.
As a result, the German government took a 30% equity stake in Uniper.
The total price for the bailout comes to 15 billion euros, or $15.3 billion dollars, as well as receiving equity and credit lines from KfW, a German state-owned bank, according to the Wall Street Journal (WSJ).
See Also: Europe And Russia Continue To Square Off Over Natural Gas
What's Next: German Chancellor Olaf Scholz cited how important Uniper is to the German economy and its energy security. Uniper will be allowed to pass some costs to customers in September or October, the WSJ report continued.
The German government provided Uniper with an extended credit line of 9 billion euros to cover short- to medium-term liquidity requirements if losses worsened.
What This Means For Shareholders: Prior to the bailout, Finnish state-owned energy company Fortum owned an 80% stake in Uniper. That stake has been reduced to 56%, per CNBC.
Uniper Energy has fallen 31% as of early Friday after the bailout was announced.
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