Here is Uniper's rescue package – three points

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The solution reached does not require additional funding from Fortum in addition to the eight billion euros already given to Uniper. kohtaa-9329e09.jpg” alt=”Tässä is Uniper's rescue package – three points” />

Fortum CEO Markus Rauramo. Petteri [email protected] at 12:56

  • Fortum's share first rose sharply, which leveled off quickly and then turned negative.
  • CEO Rauramo: “The interests of all parties were taken into account.”
  • Fortum's ownership in Uniper will decrease to 56 percent when the German state becomes Uniper's owner.

      Fortum and its subsidiary Uniper have agreed with the German government on a comprehensive rescue package to provide financial assistance to Uniper.

      There are three basic elements in the package.

      – The German state acquires a 30 percent stake in Uniper's shares by subscribing to approximately 157 million new shares for approximately EUR 267 million. The shares will be subscribed at a nominal value of EUR 1.70 per share.

      – The German government is committed to providing Uniper with a maximum of EUR 7.7 billion in financing through exchangeable instruments and, if necessary, is preparing to provide additional support to cover possible losses.

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      – The German state-owned bank KfW gives Uniper 7 billion euros in additional support to strengthen the company's financial position by increasing the amount of the previously granted short-term standby credit from the current 2 billion euros to 9 billion euros.

      In addition, the German government has announced its intention to introduce a mechanism that will allow Uniper to pass on to its customers 90% of the higher gas procurement costs caused by Russian gas supply restrictions from October 1st.

      According to Fortum, the German government is ready also to give more support to Uniper, if Russia continues its gas export restrictions and Uniper's accumulated net losses exceed 7 billion in total.

      Possible additional support is intended to be implemented in a way that does not dilute the ownership of Uniper's shareholders.

      Investors have welcomed the news. When trading in Fortum's shares started again after the suspension of trading, Fortum's shares were up by about 12.6 percent at 13.97 euros. Then the rise leveled off. At 1:17 p.m., the share was up 5.5% at 13.09 euros.

      Before the suspension of stock exchange trading, Fortum's share was up 8.0% at 13.40 euros.

      After the rescue package, Uniper's shares took a sharp plunge. At 2:02 p.m. the share was down 15.9 percent at 8.84 euros.

      Fortum's stake in Uniper is getting thinner

      As a result of the rescue package, Fortum's ownership in Uniper will be diluted to 56 percent from the current approximately 80 percent.

      After this, Fortum will continue to be the majority shareholder of Uniper and will be consolidated as a subsidiary of Uniper in financial reporting.

      Earlier this year, Fortum granted Uniper financial support of 8 billion euros. The support consisted of a shareholder loan and a guarantee from the parent company.

      – Based on the support provided by Fortum, Fortum also has the option to convert the EUR 4 billion loan it granted to Uniper into a maximum of 70 percent of the exchangeable instruments subscribed by the German government, Fortum's press release states.

      Fortum is therefore able to maintain its majority ownership. The 4 billion euro parent company guarantee previously granted by Fortum to Uniper remains unchanged.

      In the order of repayment, the loans from the German KfW bank have priority over Fortum's loan.

      CEO Rauramo: “The interests of all parties were taken into account”

      Fortum CEO Markus Rauramo commented on the rescue package in the company's stock exchange release on Friday.

      – We are in the middle of an unprecedented energy crisis, which requires strong measures. After intensive but constructive negotiations, we have found a solution in which the interests of all parties were taken into account and which is perceived as acceptable, says Rauramo.

      According to him, it was necessary to resolve the situation quickly and at the same time ensure the security of European energy supply during the war during.

      – I want to thank the German government, our colleagues at Uniper and the Finnish government for all the support during the last few weeks, says Rauramo.

      – It was also important to us that the solution reached now does not require additional funding from Fortum in addition to the eight billion euros already given to Uniper, Rauramo continues.

      According to Rauramo, the European energy system has been completely revolutionized by the impact of new geopolitical realities. , and the operating environment of European energy companies will be redefined.

      – Although we have now been able to stabilize Uniper's business, more actions are needed to create a sustainable foundation for the company's gas business. The agreement creates stepping stones to ensure that Uniper and, as a result, Fortum return to safe and stable ground, Rauramo says.

      The package still requires the necessary approvals from the authorities, especially the European Commission and Uniper's "investment grade" -confirmation of the credit rating from the credit rating agency S&P Global Ratings (S&P) and the approval of Uniper's extraordinary general meeting.

      Uniper is Europe's largest importer of natural gas, and its role as a provider of security of energy supply, especially in Germany, is key. In 2021, just under 90 billion cubic meters of natural gas was imported into Germany, of which 55% came from Russia.

      Uniper's gas midstream business portfolio includes approximately 370 TWh of long-term gas supply contracts, of which approximately 200 TWh originate From Russia.

      Tytti Tuppurainen comments on Uniper's crisis: “There are no extra costs for Finnish taxpayers”. IL-TV11.1.2018 Espoo KL ARK Fortum in new premises, Keilaniemi OUTI JÄRVINENEditorial: Business geniuses who burn citizens' property earned brand new titles 22.7. 18:31 "Good alternatives were conspicuous by their absence” – the analyst evaluates the Uniper agreement on 22.7. 20:01 Fortum's Markus Rauramo assures that the rescue package is sufficient – “Germany is committed to additional arrangements” 22.7. 16:39 Tuppurainen on the Uniper solution: “The best possible compromise” 22.7. 13:27 Fortum's share shot up – trading was suspended on 22.7. 12:11 p.m

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