(Bloomberg) — Fortum Oyj, the main owner of Uniper SE, agreed on the dilution of its stake to 56% from about 80% as part of the bailout for the German utility.
The Finnish energy company will remain Uniper’s majority shareholder and will continue to consolidate it as a subsidiary, Espoo-based Fortum said in a statement Friday.
It made no new capital injection into the German firm.
“For us it is also important that the solution now reached doesn’t require additional capital from Fortum beyond the already provided 8 billion euros of financial support,” Chief Executive Officer Markus Rauramo said.
Germany Bails Out Uniper in Fallout From Russian Gas Squeeze
Fortum will now have the option to convert its existing 4 billion-euro ($4.1 billion) loan made to Uniper against a portion of the maximum 70% of mandatory convertible instruments subscribed by the German state, ensuring its ability to retain its position as the majority shareholder, it said.
Fortum’s parent company guarantee of 4 billion euros will remain in place.
In the sequence of repayment, the loans made by German state-owned lender KfW to Uniper rank senior to Fortum’s loan.
Fortum shares rose as much as 13% after trading in Helsinki resumed, the most since 2008.
The stock had been trading 8% higher before the halt.
Uniper, which is heavily dependent on Russian natural gas, has run into difficulties as the government in Berlin hasn’t fully allowed energy companies to pass on the soaring cost of the fuel to consumers.
It became the first major corporate casualty of Moscow’s squeeze on European energy flows when it asked the German government for a bailout on July 8, prompting talks between the two governments on who should shoulder the burden.
Finland’s government has rebuffed any suggestions it would provide further funds to Uniper as pressure has been mounting to limit Finnish taxpayers’ role in the bailout, signaling its only strategic interest lies in keeping Fortum afloat.
The Finnish government holds a majority stake in Fortum.
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