Europe faces big corporate casualty
European External Action Service (EEAS) Deputy Secretary General Enrique Mora and Iranian Deputy at Ministry of Foreign Affairs Abbas Araghchi wait for the start of talks on reviving the 2015 Iran nuclear deal in Vienna, Austria June 20, 2021. PHOTO: REUTERS
Utility group Uniper asked the German government for a bailout on Friday and warned losses could reach 10 billion euros ($10.15 billion) this year, as Moscow’s economic war with Europe claims its biggest corporate casualty yet.
Uniper, which has been struggling to cover delivery obligations as falling Russian supplies sent gas prices rallying, said it was seeking additional funding through an increase in a credit facility with state-owned KfW bank.
“If you look at the price disparities and the volumes that are missing, we could be piling up 10 billion euros of losses this year,” Chief Executive Klaus-Dieter Maubach told a press conference at the company’s Duesseldorf headquarters.
He also said consumers should be aware that “very, very high price waves” were still on their way once sky-high wholesale prices were passed on.
But gas deliveries were not yet curtailed, he added, and there was no prospect of an imminent insolvency.
SPD politician Andreas Bovenschulte told the upper house of parliament on Friday that he had heard talk of a possible 9-billion-euro injection of funds into Uniper on the table, confirming media reports about the size of the sum.
Uniper has been hit hardest by a surge in prices following Russia’s invasion of Ukraine and Moscow’s subsequent squeeze on gas supplies. The company said its Finnish majority shareholder Fortum had made a proposal to the German government that includes ring-fencing the system-critical German businesses under government ownership.
Published in The Express Tribune, July 9th, 2022.
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