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Germany is being rocked by the Energy crisis and its reliance on cheap Russian gas. Since Russia’s invasion of Ukraine, the Germans vulnerability has
[See the full post at: Energy Crisis Pushes German Gas Giant Uniper SE To Seek 9 Billion Euro Bailout]Germany to Bail Out Utility Hit Hard by Russian Gas Shortfall
Germany will take a 30% stake in Uniper SE UN01 -28.90%▼ and provide a bailout deal after the ailing utility company was hit hard by dwindling supplies of Russian gas and rising energy prices.
Uniper, Germany’s largest importer of Russian gas and one of Europe’s largest utilities, has hemorrhaged cash daily as it has been forced to buy supplies at much higher prices from alternative sources after Russia reduced deliveries in June.
Russia restarted the Nord Stream pipeline on Thursday after 10 days of annual maintenance but supplies continued to be capped at 40% of its capacity. Moscow blamed technical problems for the Nord Stream shortfall, which German officials have described as an economic attack.
With a total price tag of around 15 billion euros, equivalent to $15.3 billion, in government-funded equity and credit lines, the bailout makes Uniper one of the biggest corporate victims of Russia’s campaign to weaponize gas deliveries to Europe.
A Uniper gas-fired power plant in Gebersdorf, Germany.Photo: Nicolas Armer/Zuma PressUniper shares whipsawed after the bailout announcement and were last down around 27%.
https://www.wsj.com/articles/germany-to-take-stake-in-stricken-utility-uniper-11658484565
Uniper May Need More German Bailout (5:55 p.m.)
Uniper SE’s losses to replace missing Russian gas could reach 7 billion euros ($7 billion) as early as this month, which would force the German government to step up again to help out the utility, according to Chief Executive Officer Klaus-Dieter Maubach.
“We got the stabilization package from the government, we have agreed with a 7 billion euros backstop to be reached in the fourth quarter, and it will definitely be earlier,” he said on the sidelines of the Gastech conference in Milan. “Most likely we will reach that ceiling in September already.”
Bloomberg
Uniper CEO Bemoans Germany’s Lack of LNG Capacity (3:10 p.m.)
Germany’s lack of liquefied natural gas import terminals is making the nation’s energy crisis more acute, according to Klaus-Dieter Maubach, chief executive of Uniper SE.
“In Germany, we don’t have options,” he said at the Gastech conference in Milan. “We would be able to replace a lion share of Russian gas if we had infrastructure.”
Natural gas prices in Europe are likely to ease from today’s elevated levels, according to Maubach. However, there are no indications prices will get back to low levels soon.
Bloomberg
Germany’s Gas Storage Target in Jeopardy (2:41 p.m.)
Germany is unlikely to meet its target for filling gas storage sites to 95% by the start of November following the latest Russian supply cut, according to people familiar with the matter. While Europe’s largest economy is ahead of schedule in its efforts to boost winter reserves, the indefinite halt of the key Nord Stream pipeline jeopardizes further refilling, the people said.
Bloomberg
Economic Crisis Contagion ..
higher unhedged #energy in Europe costs hitting Arconic $ARNC 22.68 ▼ 2.81 (▼11.01%)
Lowers FY22 revenue and adjusted EBITDA guidance to reflect impact of operational issues and combination of demand declinesThird quarter 2022 Adjusted EBITDA is expected to be in the range of $135 million to $150 million. The third quarter results will be impacted by production outages and other operational challenges in Tennessee and Davenport that have reduced production from planned operating rates. Additionally, hyperinflationary energy costs are driving increased cost pressures and declining demand in Europe, which are expected to have an increasingly negative impact on third and fourth quarter results.
September 21 – Wall Street Journal (Rochelle Toplensky): “Germany’s nationalization of gas giant Uniper… lays bare the seismic ructions in the once-sleepy world of European utilities triggered by the new Cold War with Russia. Investing in the sector will change dramatically. Berlin said it would inject €8 billion… It will also buy Finnish utility company Fortum’s majority stake in Uniper at the same rate. The deal ups the ante after the state’s first attempted bailout, announced just two months ago, proved insufficient… There are echoes of the 2008 financial crisis. Even if Lehman Brothers was the bank that didn’t get bailed out, Uniper is similarly too big to fail and German government officials are warning of further bailouts.”
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