Germany has today confirmed struggling gas importer Uniper's nationalisation, adding another €8 billion to its rescue as Berlin scrambles to secure power for Europe's largest economy after Russian supply cuts.
Nationalising Germany's largest importer of Russian gas is the second move in a week by the government to take control of an energy business.
It is part of a wider European response to the winter crisis, including France taking over EDF.
Germany last week also took control of a Russian-owned oil refinery, which supplies 90% of the capital's fuel, putting a Rosneft unit under the trusteeship of the industry regulator and taking over the Schwedt plant.
Uniper, whose shares fell as much as 39% to €2.55, burned through its cash buying alternative supplies after Moscow cut gas flows to Germany, triggering a €15 billion state rescue package in July.
But as with other European energy companies that have failed to cope with soaring gas prices, it soon became clear that the bailout was not enough to cover Uniper's deepening losses.
Germany will now inject yet more cash, partly by buying out Finnish utility Fortum's holding for €1.70 a share.
After completing a capital increase and the Fortum share buy, which excludes the Finnish firm's subscription rights, Germany will hold 99% of Uniper, its economy ministry said.
"The state will - that's what we're showing now - do everything possible to always keep the companies stable on the market," German economy minister Robert Habeck told reporters.
Habeck also said Berlin will impose a gas levy on consumers as planned from the start of October to help importers with the additional costs of replacing Russian gas.
However, there will be an analysis of whether that levy is in accordance with German law after the nationalisation of Uniper, which could take about three months, he said.
German gas importers face losses because they cannot directly pass the higher gas prices on to their customers.
While German consumers have been largely protected from the price hikes so far, other Europeans are paying very high prices for their energy. Fortum has taken on sizeable Uniper losses, which has caused discontent in Finland.
Fortum said that under the deal it will be paid back a €4 billion parent company loan and released from a €4 billion parent guarantee it had given Uniper earlier this year.
"We are investing in Uniper with €8 billion in equity and are effectively buying Fortum out," Habeck said, while Finland's government, which has a 50.76% holding in the Finnish utility, said it would have to live with the deal
Fortum said in March 2020 it had made investments worth €6.5 billion to give it a 69.6% stake in Uniper. It later raised its stake to 80%, which it held until the July dilution.
For years, Fortum has been a significant contributor to the Finnish state budget through dividends, but in the second quarter of this year alone, it reported a loss of €9.1 billion due to Uniper's losses in gas trading.
Under today's agreement, Fortum will not take on Uniper's losses for the third quarter, as it would have under the July deal. This will free up €5 billion to Fortum.