September 22, 2022: -On Wednesday, the German state agreed to the nationalization of utility Uniper as it keeps the industry floating in the wake of an energy crisis.

Having accepted in July to bail out the major gas importer with a 15-billion-euro rescue deal, the state will buy out the 56% stake of Finland’s Fortum for 0.5 billion euros. The German state is set to own nearly 98.5% of Uniper.

“Since the stabilization package for Uniper was agreed in July, Uniper’s situation has further deteriorated rapidly and significantly; as such, recent measures to resolve the situation have been agreed,” Fortum announced in a report on Wednesday.

Uniper is Germany’s largest gas importer and has been squeezed by vastly reduced gas flows from Russia, which has made prices soaring.

Earlier this month, Russian state-owned energy giant Gazprom indefinitely halted gas flows to Europe through the Nord Stream 1 pipeline. Uniper CEO Klaus-Dieter Maubach told CNBC that would exacerbate the company’s struggles.

Fortum will be doing deconsolidate Uniper as of the third quarter of 2022, the company said, while Fortum’s 4 billion euro loan to Uniper will be repaired, and the Finnish company will be lifted from a 4 billion euro parent company guarantee.

“Under the recent circumstances in the European energy markets and recognizing the severity of Uniper’s situation, the divestment of Uniper is the correct step to take, not for Uniper but for Fortum,” said Fortum CEO Markus Rauramo.

“The role of gas in Europe has changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio. The business case for an integrated group is zero longer viable.”