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BERLIN (AP) — Germany said Monday that it is nationalizing the former German subsidiary of Russian natural gas company Gazprom months after it was put under the control of a government agency, marking its latest nationalization in the energy industry since the war in Ukraine.
The government cited the debt load of the company, which has been renamed Securing Energy for Europe, and said it was making the move to head off the danger of bankruptcy and ensure that its operations keep running.
The Economy Ministry said that SEFE, which is involved in the trade, transport and storage of natural gas in Germany and neighboring countries, is “a key company for Germany’s energy supply.” Germany has Europe's biggest economy.
As European countries supported Ukraine, Russia slashed flows of natural gas used to heat homes, generate electricity and power industry, creating an energy crisis that is fueling inflation and forcing some factories to shut down as prices rose. Germany, a major importer of Russian gas before the war, hasn’t received any gas from Russia since the end of August.
The government put Germany’s network regulator in charge of what was then Gazprom Germania in early April after an opaque move by the former parent company to cut ties with the unit. The regulator was appointed as the company’s trustee, with the right to dismiss and appoint managers.
The company was subsequently hit with sanctions by Russia in a tit-for-tat move for Western sanctions over Ukraine.
Germany's Economy Ministry said that the Russian sanctions have put the company in a difficult financial situation and that business partners and banks have either ended ties with it or declined to build new ones as a result of the unclear ownership situation.
SEFE already had received 11.8 billion euros ($12.2 billion) in government loans to stabilize the company. That is now being increased to 13.8 billion euros.
The government is taking over SEFE via a capital cut that removes previous stockholders, along with an injection of some 225.6 million euros in new capital under the umbrella of a government-held holding company.
It's the latest energy sector nationalization by Germany. In September, the government said German authorities were taking control of three Russian-owned oil refineries to ensure energy security. Two subsidiaries of Russian oil giant Rosneft were put under the administration of the national network regulator.
Shortly afterward, the government announced the nationalization of the country’s biggest natural gas importer, Uniper. The company’s losses had mounted as Russia reduced gas supplies.