European Commission has approved € 225.6 million aid to support German energy company SEFE GmbH
The European Commission has approved a € 225.6 million German aid to support a German energy company – SEFE Securing Energy for Europe GmbH (SEFE GmbH), to overcome losses caused by Russia’s invasion of Ukraine and disrupted energy supplies.
Previously known as Gazprom Germania GmbH, the company is currently placed under the trusteeship of Germany. The measure will allow the German State to take the 100% ownership of SEFE GmbH replacing Gazprom Export LCC, in order to safeguard the security of gas supply to the German economy.
The measure was approved under Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the European Union (E.U.) economy is experiencing a serious disturbance, by following the principles set out in the State aid Temporary Crisis Framework.
SEFE GmbH has a 14% share in the gas supplies market in Germany and is active also in other Member States. In addition, it owns and operates 28% of the gas storage serving the German market and owns gas pipelines in Germany and other Member States.
Following Russia’s aggression against Ukraine and the subsequent disruption of gas deliveries by Gazprom, SEFE GmbH has incurred serious losses.
Speaking on the occasion, the Executive Vice-President of the European Commission for a Europe fit for the Digital Age (Competition) – Margrethe Vestager said, “Gazprom’s disruption of gas deliveries is showing Russia’s unreliability as a supplier. Many importers of Russian natural gas, with fixed delivery contracts concluded with customers before the crisis, are currently not being served. Any disorderly failure to fulfil these fixed contracts can have severe consequences for customers and for the German economy. So, we welcome the change of ownership of SEFE, which will enable Germany to search for new gas suppliers while ensuring security of supply.”
On April 4, 2022, due to the attempted transfer of shares and liquidation by its Russian shareholder, SEFE GmbH was placed under the trusteeship of the Federal Republic of Germany in order to be able to continue doing business and ensure security of supply. To continue business relations with market participants and thus to be able to keep serving its customers, Germany intends to assume full ownership of the company.
Under the planned measure, the existing registered capital of € 225.6 million will be set to zero, which will de facto end the ownership of the present Russian shareholder. SEFE GmbH will then issue new ordinary shares to the same nominal amount. The present measure will therefore not change the equity of SEFE GmbH. The new shares will be subscribed by Germany.
The approval is subject to Germany’s compliance to conditions to limit potential distortions of competition, namely an acquisition ban and a bonus ban. Germany has further committed to notify to the European Commission a long-term viability assessment for SEFE GmbH and its subsidiaries covering the notified measure and, if relevant, any future planned recapitalization measure.
