Uniper shares tumbles 7% 📉 Germany will save the company?

1:20 PM November 28, 2022

As a massive LNG cargo from Australian energy company Woodside Enenrgy arrived in Europe for the first time, Uniper (UN01.DE) shares continue their sell-off, losing nearly 7% today. The utility said it would cost the German government an additional €25 billion to save the company from bankruptcy:

  • The German government agreed in September to nationalize the debt-laden company after Moscow shut down a key gas pipeline, and high energy prices left Uniper in danger of bankruptcy. The company said an initial cash injection of €8 billion from the German government "will not be sufficient to stabilize Uniper."
  • As Germany's largest gas importer, Uniper has been particularly hard hit by the war in Ukraine. It forced the company to buy gas at inflated prices on the free market. In the first three quarters of the year, Uniper reported a net loss of 40 billion euros - one of the largest losses in the history of German companies; 
  • Uniper's CEO Klaus-Dieter Maubach pointed out that the company is still incurring huge additional costs due to Russian gas supply reductions. A collapse could threaten gas supplies and wreak havoc on Europe's largest economy;
  • The revised funding figure came after Berlin abandoned a plan to force German consumers to pay extra for gas which could potentially help importers cope with rising prices and cover some of Uniper's costs. The government was likely concerned about the political impact and public reaction;
  • Germany will finance Uniper's bailout from a €200 billion special fund to mitigate the impact of the energy crisis on households and businesses. Uniper said it will ask shareholders to formally approve the bailout agreement on Dec. 19.
  • A cargo of 75,000 tons of LNG from Australia's Northwest Shelf for Uniper arrived Sunday. The pickup takes place at the Gate terminal on Massvlakte, in Rotterdam. The continent is stepping up efforts to secure supplies from alternative energy sources. The shipment is an extremely rare move for Australia, which is focused on Asian markets. According to the Australian government, the country currently accounts for about 20% of global LNG supplies.

"We continue to work to secure much-needed gas supplies to Europe from reliable sources such as Australia. thereby helping to strengthen security of supply during the ongoing crisis caused by the war in Russia" - said Uniper LNG Director Andreas Gemballa

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"Events over the course of 2022 have shown that the world cannot take reliable and affordable energy supplies for granted, especially as we move toward decarbonization (...) "In times like these, it is more important than ever for buyers and sellers to work together to respond flexibly to market dynamics. Our relationship with Uniper is an example of such cooperation." - Australian supply commented.

  • Deutsche Bank analysts expect the 'bear market rally' to continue - rising indexes and a rebound in the Eurodollar forecast a rate of 1.10 next year and a possible 1.15 at the end of the year.

Uniper (UN01.DE) shares, H4 interval. The company's shares are again under tremendous pressure, and the formation on the chart somewhat resembles a slowly drawing bearish head-and-shoulders formation (RGR) with still almost the shoulder not well visible. The RSI indicated a double top near 90 points sk± there has been a huge cooling of relative strength. The stock is still trading above the SMA100 (black line) and SMA 200 (red line), which will potentially converge with the neckline if the company's price rebounds to form the right arm of the RGR. The yellow chart is contracts on the DAX index (DE30). Source: xStation5

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