The German Government is closing in on a provisional agreement with Uniper and Fortum, its Finnish parent company, to nationalise the natural gas giant, Reuters reported on Tuesday, citing people familiar with the talks.
In July, the struggling German utility company was handed US$15 billion bailout by the German Government.
Media reports say that gas importer is the biggest casualty of Europe’s energy standoff with Russia over the war in Ukraine.
The company has been forced to buy gas on the spot market at much higher prices to make up for the shortfall in Russian supplies. It incurs daily losses of €100 million.
Last week, Uniper said that the government could take a controlling stake in the company as it seeks further state support, paving the way for what could result in a full nationalization of the firm.
The takeover deal is valued at more than €30 billion ($30 billion). Berlin is expected to purchase Fortum’s controlling stake, and then inject billions of euros into the company through a capital increase.
Earlier this month, Handelsblatt reported that the German authorities were planning to allocate €67 billion ($67 billion) to provide financial aid to domestic energy corporations suffering from supply shortages stemming from the sharp decrease in gas imports from Russia.
Bloomberg reported that Berlin is expected to announce the consummation of the deal later this week, although contracts have not yet been signed.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
