VNG applies for state aid due to high costs



Dhe gas importer VNG needs state help because of the failure of Russian deliveries: The company will be on Friday Federal Ministry of Economics submit an application for stabilization measures, the company announced in Leipzig in the morning. "In order to avert further damage from VNG and to ensure the ability of the VNG Group to act as a whole," the company felt compelled to apply for further aid measures, it said.

The ailing East German gas company is one of the largest German gas importers alongside the Uniper Group, which is also in crisis. Because of the halt to Russian supplies, they have to buy gas on the market at exorbitant prices in order to meet their obligations.

The company had already submitted an application for funds from the so-called gas levy. The reason for the recent step is that gas has to be procured at “significantly higher prices on the energy markets” because of unfulfilled delivery obligations from upstream suppliers, it said on Friday.

"Up until the start of the Russian war of aggression, VNG was a very healthy group of companies," the importer said. The company supplies gas to municipal utilities, industrial and large customers, among others, and has to fulfill the contracts. However, since Russia has drastically reduced its supplies during the war, the supplier has to procure replacements at significantly higher prices. VNG is a subsidiary of the EnBW group. After the application for state aid became known, EnBW's share price fell by more than 9 percent.



Source link