The federal government and ailing energy company Uniper agreed to a rescue package worth billions.
The stabilization package provides for a capital increase of around 267 million euros at an issue price of 1.70 euros per share, excluding shareholders’ subscription rights, the company announced Friday in Düsseldorf. The capital increase will be subscribed exclusively by the federal government and will result in the federal government’s participation of approximately 30% in Uniper. In addition, a mandatory conversion instrument of up to €7.7 billion must be issued to the federal government. The issue will be in tranches to the extent required by Uniper’s liquidity needs. In addition, KfW’s previous credit facility will be increased from €2 billion to €9 billion and the scope will be expanded./lew/mis
Uniper collapses – bailout means massive stock dilution
Strong stock sales pushed Uniper shares to a record low on Friday. Investors were reacting to the federal bailout package for the badly hit energy supplier. The price temporarily dropped via XETRA by 33.00% to 7.04 euros. Shareholders face massive stock dilution.
The stabilization package provides for a capital increase of around €267 million at an issue price of €1.70 per share, excluding shareholder subscription rights. The capital increase will result in the federal government holding approximately 30% in Uniper. In addition, a so-called mandatory convertible instrument of up to 7.7 billion euros must be issued to the federal government.
“Ultimately, there is still recognition of how much shareholder ownership is diluted by the state bailout – even if the picture largely matches expectations,” said market expert Frederik Altmann of Alpha Securities Trading. Other examples of partial nationalization, such as Commerzbank or Lufthansa, impressively show how little is left for the shareholder.
Uniper’s shares have been under pressure for months. Before the start of Russia’s war against Ukraine, they cost around 40 euros. Due to the bottleneck of Russian supplies through the Nord Stream 1 Baltic Sea pipeline, the company has to buy more expensive gas on the market to fulfill the contracts. This leads to liquidity problems. Uniper applied for state aid two weeks ago.
On the Finnish stock exchange, shares in Fortum, the parent of Uniper, fell six percent on Friday. Fortum’s stake in Uniper will be diluted from around 80% to 56% during the entry of the German state. However, participation could be increased again by a mandatory convertible bond that was also announced.
The mandatory change instrument provided for in Uniper’s rescue package has a volume of up to 7.7 billion euros. Mandatory convertible bonds are interest-bearing securities that must be converted into shares at the end of the term at the latest. They are therefore considered by rating agencies to be similar to equity. At Uniper, the issuance will be made in tranches to the extent that the Group’s liquidity needs so require. The exchange price per share in the event of conversion provides for a discount of 25 to 50 percent on the market price of Uniper shares in a given period prior to the conversion.
Fortum has the option to acquire shares of the mandatory conversion instrument from the federal government.
Uniper: Estimated cost for replacement purchase volumes at 4.5 billion euros
Energy company Uniper will face more charges in the billions in the coming weeks. Klaus-Dieter Maubach told a press conference Friday afternoon in Düsseldorf that he estimated the costs for replacement procurement volumes through the end of August at 4.5 billion euros. September would cost another 1.7 billion euros. The federal government allocation procedure should then take effect. Chancellor Olaf Scholz (SPD) announced a tax on all gas customers on Friday. The fee will come on October 1st or September 1st.
With the rate, Uniper should be able to pass on the price increases and, thus, have some financial breath. The federal government explained to Uniper during the negotiations that from October 1, 2022, a general mechanism for passing on 90% of replacement procurement costs to all importers should be introduced as a result of the Russian gas cuts.
DUSSELDORF/BERLIN (dpa-AFX)