The Düsseldorf-based energy group Uniper, which has been badly hit by a lack of Russian gas supplies, is nationalized.
The federal government is taking over “a total of 99 percent of Uniper” as part of another stabilization package, the Federal Ministry of Economics said on Wednesday.
The capital increase is therefore eight billion euros, plus almost half a billion for the previous shares of the Finnish parent company Fortum.
The federal government will nationalize Uniper in an unprecedented move to avert a collapse of Germany's energy sector this winter.
According to the federal government, the rescue of the gas importer Uniper is an “alternative, significantly more extensive stabilization package” compared to the rescue package from July.
The federal government is creating “a clear ownership structure in order to secure Uniper and thus the energy supply for companies, public utilities and consumers.”
The Finnish parent company Fortum Oyj announced on Wednesday that the federal government will inject EUR 8 billion into the Düsseldorf utility via a capital increase at EUR 1.70 per share.
Uniper is losing millions of euros a day after Russia cut off gas supplies to Europe.
As part of the deal, the federal government will take full ownership of Uniper and acquire Fortum's majority stake of around 78 percent for about €500 million, according to Fortum, which is majority-owned by the Finnish state.
After the transaction is completed, the German state will hold around 98.5 percent of Uniper.