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Germany will buy Fortum’s stake in Uniper and inject 8,000 million euros

Germany is ready to buy Fortum ‘s (HE: FORTUM ) 78% stake in Uniper (ETR: UN01 ) and inject another 8 billion euros ($8 billion) into the group. as part of the nationalization of the gas importer, the company said on Tuesday.

Uniper, Germany’s biggest importer of Russian gas, depleted its cash reserves by sourcing gas on the spot market after Russia cut off flows to Germany, triggering a rescue package with Berlin agreed in July.

Uniper said it was in final talks with the government and Fortum to modify the July bailout package, which has proven insufficient given spiraling gas prices.

“As a result, the federal government is expected to obtain a significant majority stake in Uniper,” the company said, adding that a definitive deal has not yet been closed.

The capital injection from the German government will bring the total rescue package used to stabilize Uniper to a minimum of 29 billion euros.

Europe’s confrontation with its main energy supplier, Russia, over the war in Ukraine has hit the German energy sector hard. The government has already had to put Gazprom (MCX: GAZP ) Germania and a subsidiary of Russian oil company Rosneft (MCX: ROSN ) under guardianship, a de facto nationalization.

Uniper’s smallest company, VNG, also an importer of Russian gas, also had to apply for state aid to stay afloat.

Fortum said the deal with Uniper will include the “repayment of the financing that Fortum granted to Uniper”, which the Finnish group has estimated at 8 billion euros.

For Fortum, the operation will put an end to a failed investment in Uniper that began in 2017 and which the German group resisted for fear that it could be dissolved by its main shareholder.

A final deal on the nationalization of Uniper will be unveiled on Wednesday, the sources have said.

“We need the state as the main shareholder to survive the gas crisis and master the energy transition in the long term,” Uniper works council chief Harald Seegatz told the Rheinische Post.

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