Reacting to news of state-owned Fortum selling off its majority stakes in troubled gas firm Uniper to the German state, Finland's Minister for European Affairs and Ownership Steering, Tytti Tuppurainen (SDP), said on Wednesday that the deal was inevitable in order to limit losses and avoid Finland having to further capitalise the company.
Due to Uniper's rapidly-deteriorating financial situation and significant increases in risks facing the company since a July bailout agreement, Fortum agreed to sell its entire stake in the company to Germany.
As of August, Russia stopped exporting natural gas via the Nordstream pipeline to Germany, causing Uniper major difficulties.
Tuppurainen said that the sale would limit Fortum's losses and allow the firm to concentrate on its core business in the Nordic energy market.
According to Tuppurainen, it was also important to guarantee Fortum's electricity production in Finland, and to make sure the Finnish state does not have to further capitalise Fortum or to finance Uniper.
The minister also acknowledged that Fortum's original acquisition of Uniper in 2017 caused billions of euros in losses and could be seen as a mistake.
Tuppurainen: Agreement secures Fortum's position
In the Uniper deal, Germany is to pay Fortum around 500 million euros as well as eight billion euros in financing Fortum previously provided to the company.
"This agreement secures Fortum's position and the state does not now need to capitalise the company. Of course, no one can say for sure," Tuppurainen said.
Germany said it decided to acquire Uniper to ensure that domestic industry and households have access to energy.
According to Tuppurainen, going forward, Germany will be responsible for the company, which is making losses in the hundreds of millions of euros a day.
However, Tuppurainen also pointed out that the problem stemmed from Russia's invasion of Ukraine, and that Russia was using energy as a weapon.
Rikka Purra: Germany clear winner
Riikka Purra, chair of the opposition Finns Party, says that the transfer of Uniper from Fortum to the German state cannot be considered a victory.
Purra noted that she was commenting on the matter without knowing the exact details of the deal.
"It can't be considered a big profit if the money borrowed is repaid, because that is a legal requirement," Purra said, referring to news that Fortum would receive half a billion euros for its Uniper stake as well as the eight billion euros financing package it had provided the German company.
Purra said she anticipates further losses in the future, adding that significant write-downs are coming and that she sees it as likely that Fortum will need to be capitalised in the future.
"Germany was the clear winner here," Purra said.