Why was the transfer of SEFE to federal ownership ordered?

The change of ownership was carried out in order to stabilize SEFE as a company of systemic importance for the energy supply. The reason was SEFE's balance sheet over-indebtedness and the resulting threat of insolvency, which would have endangered the security of supply in Germany. The corresponding order was published in the Bundesanzeiger.

What measures were enforced after SEFE was transferred to federal ownership?

In the course of the transfer, capital measures were ordered by the Federal Ministry for Economic Affairs and Climate Action (BMWK) in accordance with the Energy Security Act. With the help of a capital cut, the losses and the resulting negative equity of SEFE were offset against the revenue and capital reserves and the capital was reduced to zero.

Why did SEFE receive a KfW loan?

In May 2022, Russia imposed targeted sanctions on SEFE. The subsequent suspension of all Russian deliveries to SEFE resulted in high replacement costs and had a negative impact on the company's capital structure. For this reason, SEFE was provided with a substantial loan from KfW to avoid over-indebtedness of the company and prevent further negative consequences.

What is the amount of the loan SEFE was provided with?

In order to secure the company's liquidity, SEFE was already gradually granted a KfW loan totaling EUR 11.8 billion in spring 2022. With the transfer of the Federal Government, the KfW loan was increased once more to EUR 13.8 billion to compensate for the elimination of the gas levy.

Why did SEFE apply for further financial support from the Federal Government?

Further financial support from the Federal Government was requested because the company's equity capital was almost completely used up due to the high replacement costs.

What is the justification for the financing measure?

The measure is justified by the stability of the gas supply and was ordered by the BMWK by way of an administrative act in accordance with § 17a of the Energy Security Act. The prerequisite for this is that without further capital measures, the security of supply in Germany and Europe would be at risk.

SEFE including almost all subsidiaries have been in financial difficulties since May 2022 due to Russian sanctions. To make matters worse, business partners and banks have terminated their business relations with SEFE due to the unclear ownership structure and sanctions.

From which funds will the capital measures for SEFE be financed?

The measures will be financed from the EUR 200 billion of the reactivated Economic Stabilization Fund of German Federal Government.

Is SEFE still affected by sanctions?

Due to the capital cut and the associated change of ownership, European and other Western sanctions are no longer applicable to SEFE.

What other financial measures were taken by the federal government to stabilize SEFE?

A significant part of the EUR 13.8 billion KfW loan amounting to EUR 6.3 billion was converted into equity through a contribution to SEFE's capital reserve. The remaining part of the KfW loan is still available to SEFE as debt capital. This debt-equity swap was approved by the European Commission under state aid law on 20 December 2022 and covers SEFE's replacement costs and secures sufficient equity for SEFE to conduct its business as planned.