April 20 (Reuters) – Germany will begin privatization of the Gazprom unit seized by Berlin post Russia’s 2022 invasion of Ukraine, its chief executive told the Financial Times in an interview published Monday.
The division, called Securing Energy for Europe (SEFE), also intends to raise 1.5 billion euros- 2 billion euros($1.76 billion- $2.35 billion) through a capital increase to finance the expansion of its infrastructure assets business, the FT said.
SEFE, previously Gazprom Germania, was nationalized by Berlin in 2022 after the group’s former Russian parent ditched the division, which is a vital part of Germany’s gas supply. The firm operates 4,200 kilometres (2,610 miles), or 10%, of Germany’s gas network system.
European Union rules require the German state to cut its stake to no more than 25% plus one share by 2028.
CEO Egbert Laege told the FT that the Iran war had lent momentum to privatization plans, with constrained Middle East gas flows highlighting the importance of reliable suppliers.
Germany plans to dilute its SEFE holding after the initial capital increase, potentially via another sell-off, an initial public offering or other options, Laege added.
“Given the short time in which we’re operating, maybe the IPO is a bit difficult for us but in the end this is up to the markets and it’s a decision for the government,” he said.
($1 = 0.8506 euros)
(Reporting by Ananya Palyekar in Bengaluru; Editing by Ronojoy Mazumdar and Mrigank Dhaniwala)