Germany is considering taking a majority stake in Uniper as the utility giant suffers massive losses during Europe's energy shock

• German utility Uniper said Wednesday the German government may take a majority stake in the company.
• Uniper has lost billions of euros this year in the wake of Russia's invasion of Ukraine.

Germany is weighing a nationalization of Uniper as the utility company faces growing financial losses stemming from soaring gas prices in the wake of Russia's war against Ukraine.

The government is looking into an equity increase into Uniper that would result in a "significant majority participation," Uniper said in a statement Wednesday. Bloomberg had reported the government was considering increasing its stake in Uniper beyond the 30% holding it acquired in a rescue package for the company in July.

Frankfurt-listed shares of Uniper dropped as much as 20% during Wednesday's session before paring the decline to 15%.

Uniper lost €12.4 billion ($12.4 billion) in the first half of 2022 as gas prices soared after Russia reduced flows into Europe.

"Since the stabilisation agreement was signed, the European energy crisis has escalated further as no Russian gas volumes are currently being supplied through Nord Stream 1 and both gas and power prices have been extremely high and volatile," Uniper said. "Consequently, since July, Uniper's financial losses due to the higher gas procurement cost have significantly increased."

The Nord Stream 1 pipeline runs under the Baltic Sea to northeastern Germany. The German government was in talks about the fresh equity stake with Uniper's main shareholder, Finnish energy utility Fortum. No decision has yet been made, Uniper said.

The Kremlin recently said Russia will not restart sending gas supplies through its Nord Stream 1 pipeline until the "collective West" lifts sanctions against Moscow for its invasion of Ukraine.

Benchmark Dutch gas futures during this year had jumped about 1,000% from a year ago as Russia cut energy supplies to Europe, plunging the region into an energy crisis.