Fortum’s Uniper deal costs 5.5 billion euros
MINISTER European affairs and ownership management Titti Tuppurainen (SDP) said on YLE A-studio on Wednesday that it is appropriate to have a discussion about the infamous acquisition of Uniper by Fortum, which is majority owned by the Finnish state.
In his opinion, the seven billion euro acquisition was a clear mistake in retrospect, even though it proved to be profitable for several years.
“We have had too much trust in Russia as a supplier of fossil energy. But now we have at least managed to ensure the continuation of Fortum’s core operations,” he says comment in the current programme.
Fortum on Wednesday announced it has agreed to sell its entire stake in its heavily loss-making subsidiary to the German government for 500 million euros, which corresponds to a share price of 1.7 euros. The total amount is less than 10 percent of the price paid by the state-majority energy company to the natural gas giant in 2017.
Helsingin Sanomat on Wednesday reminded that Uniper paid Fortum almost a billion euros in dividends over the years, which reduced the loss to around 5.5 billion euros. The calculation does not include debt capital expenses related to the original purchase.
Uniper also promised to repay its parent company’s four billion euro loan and to release its parent company from the four billion euro guarantee it received at the beginning of the year. In this way, Fortum managed to avoid the worst possible scenario, where the loan and guarantee had to be waived and it would face serious financial difficulties.
News of the agreement caused the energy company’s shares to rise by 9.5 percent on Wednesday.
Markus RauramoFortum’s CEO stated on YLE A-studio that the company is disappointed and surprised to have to sell its subsidiary.
– After last year’s good result, the Russian attack [on Ukraine] was a surprise. We prepared for many things. There have been smaller armed conflicts in Russian territory, but the war still came as a surprise, he commented.
Rauramo said that Fortum is balancing its finances and rebuilding itself on three foundations: the implementation of the Uniper agreement. The decision to withdraw from Russia. And ensuring the company’s liquidity.
On Wednesday, Tuppurainen refused to comment on whether he remains confident in Fortum’s board.
“We now have to let the executive management do their job. Rocking the boat makes no sense. The memorandum of understanding was signed today and we should be confident of its implementation. The work must be taken seriously”, he commented and added that the state should have a representative on the boards of all state-owned companies.
Opposition leaders refuse to release the government
Kai MykkänenOn Wednesday, the chairman of the coalition’s parliamentary group continued to reprimand the government for its handling of the situation. He emphasized that Finnish taxpayers will now get back less than 10 percent of the money originally poured into Uniper.
According to him, the Finnish government made mistakes last summer in the negotiations regarding the stabilization package of the faltering natural gas giant, when the German government demanded that the company may not transfer the high costs to retail prices until October.
Last week it turned out that the costs will not be passed on to retail prices from next month either.
“That was the last nail in the coffin. After that, Uniper became a worthless skeleton and fell into Germany’s arms. If the costs had been transferred to prices in August, for example, Uniper would now be worth billions instead of hundreds of millions,” Mykkänen reasoned.
Riikka PurraThe chairman of Purusfinnishi said that Fortum’s transfer of Uniper to the German state cannot be dressed up as a success.
“You can’t think of getting the money you borrowed back as a big profit, because that much is required by law,” he commented according to YLE.
Aleksi Teivainen – HT