German gas and power company Uniper, a major consumer of Russian natural gas, has fallen into financial difficulty and has requested assistance from the German government.
The Ukraine crisis and the resulting sanctions on Russia have made it difficult for European power companies to procure gas, forcing them to procure in spot markets, where prices are significantly higher than long-term contracts.
A spokesman for the Ministry of Economy said he was in talks with Uniper on stabilization measures.
Uniper’s CEO, Klaus Dieter Maubach, is discussing the possibility of guarantees, raising credit lines, and the possibility of government investment.
Uniper stocks fell 16% at 0830 GMT (5:30 pm Japan time). It has fallen 68% since the beginning of the year, the lowest since March 6, 2017.
Uniper says that since June 16th, only about 40% of the contract will receive gas from Gazprom.
Uniper’s problem puts pressure on the German government to allow utilities to pass on rising energy costs. This month, the German government issued a second-stage “warning” in a three-stage emergency plan on natural gas, but has forgotten the enforcement of a clause to pass on costs to consumers.
Uniper withdrew its 2022 adjusted earnings before interest and tax (EBIT) and net income forecasts ahead of the announcement of its first half financial results on August 2.
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