State aims to safeguard electricity production in all conditions
In 2017, Fortum’s Board of Directors decided that the company would become a major shareholder in the German energy company Uniper SE. With the acquisition, Fortum became the third-largest producer of emission-free electricity in the EU. At the same time, the company’s business activities expanded to include fossil energy production and commodities trading in Central Europe, and the scope of its activities in Russia increased.
On 21 September, Fortum, the German Government and Uniper signed an agreement on a solution that will allow the German State to become Uniper’s majority shareholder. Uniper’s financial situation has deteriorated rapidly and the risks surrounding the company have increased significantly since the stabilisation agreement signed in July. As a result, Fortum has decided to sell all of its holdings in Uniper SE. The solution will enable Fortum to limit the risk of losses caused by the war and concentrate on its core business operations. At the same time, by taking control of Uniper, the German State will be able to secure energy supply in Germany.
“Fortum’s Board of Directors has made an unavoidable decision amid exceptional uncertainty. Fortum must protect its financing position in a way that ensures its ability to carry out its core functions. The State has set a strategic interest for the company, and safeguarding this interest is of primary importance from the State’s point of view. The situation at hand is a result of Russia’s war of aggression in Ukraine. Putin is using energy as a weapon, most recently by shutting down the Nord Stream 1 gas pipeline. The aim of the State as an owner has been to find a solution in which Fortum would ensure the repayment of its EUR 4 billion shareholder loan to Uniper and be released from its EUR 4 billion parent company guarantee, and in which the company’s owners would not need to capitalise Fortum as a result of the Uniper crisis,” says Minister for European Affairs and Ownership Steering Tytti Tuppurainen.
The arrangement still requires the necessary authorisations and approvals from the authorities, along with decisions from Uniper’s Extraordinary General Meeting. The goal is for the arrangement to be complete by the end of this year.
The State’s strategic interest in Fortum is ensuring sufficient electricity production in Finland under all circumstances. It is in the State’s interest to make sure that the company is able to perform this security of supply task without disruption and to safeguard its long-term operating and investment capacity in the Finnish energy market.
The Ministerial Committee on Economic Policy discussed the matter in two meetings on Wednesday 14 September and again on Sunday 18 September. At its meeting on Sunday, the Ministerial Committee noted the key content of the solution, which Fortum’s Board of Directors had carefully considered to be in the interests of Fortum and all its shareholders. The Ministerial Committee agreed that, as Fortum’s majority shareholder, the Finnish State would accept the proposed solution.
Inquiries: Maija Strandberg, Senior Ministerial Adviser, tel. +358 295 160 981, [email protected]