Former Gazprom unit SEFE targets €2 billion capital hike ahead of 2028 privatization

Securing Energy for Europe GmbH (SEFE), the state-owned energy group formerly known as Gazprom Germania, has announced it is prepared to initiate the first phases of its privatization process. The company was taken under the control of the German government in 2022.

According to a report by the Financial Times, SEFE Chief Executive Egbert Laege detailed the strategy and timeline for the transition. Laege stated that SEFE plans to secure between €1.5 billion and €2 billion in capital through a capital increase.

The proceeds from this move are intended to fund the expansion of the company’s infrastructure business, which includes gas storage facilities and pipelines, as well as the growth of its UK-based trading unit.

The capital increase represents the initial step in the gradual reduction of the German government’s 100% stake in SEFE. Under European Union regulations, Berlin is required to divest at least 75% of its shares in the company by the end of 2028.

Laege noted that the government’s stake would be further reduced in the future through mechanisms such as a secondary public offering (IPO) or a direct sale. The CEO emphasized that while an IPO could prove complex given the limited timeframe, the final decision remains contingent on market conditions and government policy.

Laege indicated that geopolitical tensions involving the US and Israel with Iran have added momentum to the privatization process. He noted that disruptions to energy flows in the Middle East have highlighted the importance of reliable suppliers. However, he also observed that SEFE’s critical role in German energy security might be appraised differently by potential investors.

“Considering that we are at a very critical juncture in terms of security of supply, we are discussing with the government whether there are any specific preferences or restrictions,” Laege said.

While industry experts have suggested that SEFE’s assets could be sold off piecemeal or merged with Uniper, another nationalized energy importer, Laege opposed such an approach.

The CEO argued that the infrastructure and trading units are complementary, describing them as two “engines” that must remain together. While noting it is natural for the government to examine the potential value created by a merger—given it owns both companies—Laege added that SEFE is currently proceeding under the assumption that the process will remain independent.

The German government transferred Gazprom Germania to the temporary management of the Federal Network Agency (Bundesnetzagentur) in April 2022 to ensure energy security following Gazprom’s decision to cease operations at the subsidiary.

In November of the same year, the government became the sole owner of the SEFE group and all its subsidiaries. Moscow characterized these steps as illegal and, in May 2022, imposed sanctions on 31 foreign subsidiaries, including Gazprom Germania GmbH.