Germany is nationalizing a local unit of Russia's energy giant Gazprom, in an $8 billion bid to keep it from collapsing
- Germany is nationalizing a former subsidiary of Russia's Gazprom, to avert its collapse.
- The local gas network operator is key to Germany's energy supplies, the economy ministry said.
Germany has nationalized a former subsidiary of Russia's natural gas giant Gazprom, to avert its collapse as it tries to nail down its energy needs.
The German government is taking Security Energy for Europe into federal ownership, the economy ministry said in a statement Monday. The move was necessary to save the ailing gas company from the threat of bankruptcy, it said.
"The reason for this is SEFE's overindebtedness in the commercial balance sheet and the resulting threat of insolvency, which would jeopardize the security of supply in Germany," it said.
"In order to avert this danger and to maintain SEFE 's operational business, the change of ownership is now being completed and the company stabilized.," it added.
SEFE — formerly known as Gazprom Germania — was put under the trusteeship of the German state in April, after the sale of the local gas network operator to another Russian company clouded its ownership.
The former Gazprom unit has struggled financially since the early months of this year, as Moscow crunched gas supply to Europe in retaliation to Western sanctions imposed over its war with Ukraine. European natural gas prices have soared 60% this year, and the supply squeeze forced SEFE to buy natural gas at higher prices, leading it to rack up big losses.
While Germany has eased worries about a severe energy crisis this winter by filling up its gas stockpiles, it is still scrambling to replace the supplies cut off by Russia. Its leaders have accused Moscow of "weaponizing" its energy supplies as it cut then completely halted flows of natural gas to Germany via the key Nord Stream 1 pipeline.
The government will take a 100% stake and inject equity capital of 7.7 billion euros ($8 billion) into SEFE, Bloomberg reported. It will increase its loan to the company to 13.8 billion euros.
SEFE is the second energy company Germany has nationalized in the fallout from the Ukraine war. In September, it took a 99% stake in Uniper in a 15 billion euro ($14.9 billion) bailout, to protect the country's winter supplies.
The same month, Germany took control of Russian-owned Rosneft's subsidiary in the country, including three oil refineries. The move secured a refinery key to fuel for Berlin ahead of an EU ban on seaborne Russian oil.
- RANKED: The world's 20 strongest militaries
- I quit buying from Amazon 4 years ago. I get better deals on products elsewhere but still have to use their services.
- Gen Z faces more pressure at work than previous generations because technology has eliminated work-life boundaries, a psychology professor says
- Snapping 6-day gains, Indian stock indices in red; high valuations a concern
- ED issues look out notice against Byju Raveendran: Sources
- Sugar stocks slip after govt raises fair price to ₹340 per quintal
- Social media platform 'X' decides to withhold accounts after Indian govt executive orders
- With 1 lakh footfalls per day, Ayodhya is giving its residents a 'better life'