April 20 (Reuters) – German energy company SEFE said on Monday it has proposed a capital increase of up to 2 billion euros ($2.35 billion) to start a privatisation process under which the state must cut its shareholding to a blocking minority by the end of 2028.
Formerly owned by Russia’s Gazprom, SEFE was rescued by Germany in a 6.3-billion-euro nationalisation during Europe’s energy crisis in 2022 following Russia’s invasion of Ukraine.
SEFE said such a capital increase, if approved, could be implemented over the next nine to 12 months.
It said it had proposed the capital increase of 1.5 billion to 2 billion euros to Germany’s Economy Ministry, which oversees Berlin’s ownership of the company, and that talks over the matter were underway.
A vital part of Germany’s gas supply, SEFE – which stands for Securing Energy for Europe – operates 4,200 km (2,610 miles), or 10%, of Germany’s gas network system. It is also an energy trader.
European Union rules require Germany to cut its stake to no more than 25% plus one share by 2028 in exchange for allowing the 2022 bailout, a condition that also applies to Berlin’s 99.12% ownership of SEFE’s peer Uniper.
The German Economy Ministry said it was exploring several options as part of SEFE’s planned reprivatisation, adding no decisions had been taken yet and that there was no firm timeframe.
SEFE CEO Egbert Laege told the Financial Times, which first reported the capital increase plans, that the Iran war had lent momentum to the privatisation 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 selloff, 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 = 0.8502 euros)
(Reporting by Ananya Palyekar in Bengaluru, Christoph Steitz in Frankfurt and Holger Hansen in Berlin; additional reporting by Alexander Ratz; editing by Ronojoy Mazumdar, Mrigank Dhaniwala and Emelia Sithole-Matarise)