German government agrees to rescue package for Uniper

The German government has agreed on a bailout for Uniper UN01, -15.00%, which has been hit by reduced Russian gas imports, the company said. Terms call for the German state to take a 30% stake for 267 million euros, provided further capital of up to 7.7 billion euros against issuance of mandatory convertible instruments, and for the state-owned KfW bank to boost its existing credit facility to 9 billion euros from 2 billion euros. The German government intends to introduce a cost absorption mechanism that covers 90% of the losses resulting from higher costs for gas replacement volumes caused by Russian gas curtailments from Oct. 1. Fortum’s FORTUM, -1.37% stake in Uniper will be diluted to 56% from 80%.