German gas importer Uniper, one of the biggest corporate casualties of the war in Ukraine, has acquired €4 billion in its Russian subsidiary after losing control of the company.
The nationalized energy giant, rescued by Berlin in a multibillion-euro bailout last year, said it had not been given access to information about its power generation subsidiary Unipro since the last three months of last year.
Although it is the majority shareholder with a stake of 83.7 percent, it remains in the dark as a clear illustration of the fallout for western business from Russian president Vladimir Putin’s invasion of Ukraine.
The group, which is Europe’s biggest importer of Russian gas, announced a net loss of €19bn last year, but has promised to return to profitability, despite problems with its Russian subsidiary.
Klaus-Dieter Maubach, the outgoing chief executive, said in a statement that Uniper “at its core is a strong company that has succeeded through the most difficult years in its history”.
But the company warned that it “no longer has any control” over its Russian subsidiary, which employs about 4,300 people and has five gas and coal-fired power plants in industrial areas across the country.
Uniper, which was nationalized by Berlin for fear of collapse after Moscow cut Russian gas supplies to Europe, said it was forced to deconsolidate Unipro by 2022 and reported it as a halted operation with losses of €4.4bn.
Outgoing chief financial officer Tiina Tuomela said in a call with investors that while Uniper had found a local buyer for Unipro, they had not yet received “presidential approval”, suggesting the sale was blocked by Putin.
Prospects for the sale are “still outstanding and uncertain”, he added.
Tuomela said western sanctions on Russia had “further undermined Uniper’s ability to control as a major shareholder”.
He refused to say what price has been agreed for the sale, saying the information is confidential.
Uniper is one of the most important customers of the Russian energy group Gazprom, but has since suffered heavy losses after Moscow cut supplies to Germany via the Nord Stream 1 pipeline.
The German government announced in July 2022 that it would step in to support the company as fears grew about the damage it would do to the country’s economy.
Under the terms of the bailout, finalized late last year, the state injected €8bn into the company and provided an additional €25bn in authorized capital, of which €5.5bn had been used by the end of last year.
The company was also granted an €18bn credit facility by German state lender KfW.
Maubach, who was among several managers to announce his departure from the company after the bailout, said the job of his successors was to “continue to develop Uniper and make it profitable again”.
He did not elaborate on how the company plans to do after the war in Ukraine changes its business model.
Uniper said the issue of switching to Russian gas would be resolved by the end of 2024 at the latest, and promised to end financial support from the German state.
Although the net loss of €19.1bn was about half of Uniper’s €40bn loss initially predicted, the figure is still substantial and underlines the challenges the company faces as it rethinks its entire business model.