Finland's Fortum agrees to sell Norwegian electricity distribution and heat businesses, along with interests in Fredrikstad Energi, to Hafslund Group for €340M, retains its approximately 34% shareholding in Hafslund; deal set to close in Q2
April 9, 2014
– FORTUM CORPORATION STOCK EXCHANGE RELEASE 9 April 2014 at 9.00 EEST
Fortum has agreed to sell its Norwegian electricity distribution to the Hafslund Group, listed on the Oslo Stock Exchange, and its heat businesses in Norway to iCON Infrastructure Partners II, L.P. fund. The decision to divest the electricity distribution business in Norway is linked to the strategic assessment of the company's electricity distribution business' future alternatives in 2013. In heat business, Fortum focuses on larger urban centres with potential for combined heat and power (CHP) development. In addition, Fortum has agreed to sell its shareholding in Fredrikstad Energi AS (49%) and Fredrikstad Energi Nett AS (35%) to the Hafslund Group.
The total consideration is EUR 340 million on a debt- and cash-free basis. Fortum expects to complete the divestments during the second quarter of 2014 after the necessary regulatory approvals as well as customary closing conditions have been met. Fortum expects to book a one-time sales gain totalling approximately EUR 70 million and corresponding to approximately EUR 0.08 per share in the second quarter 2014 results. The sales gain will be booked in Fortum's Distribution segment and Heat and Electricity Sales and Solutions segment.
The combined sales of the Norwegian electricity distribution and heat businesses amounted to EUR 105 million in 2013. The combined comparable operating profit of the businesses was EUR 24 million and comparable EBITDA was EUR 39 million. Combined net assets at the end of 2013 were EUR 247 million.
Fortum's Norwegian electricity distribution grids are located in the Østfold area in southeastern Norway delivering approximately 2.6 terawatt-hours of electricity to approximately 103 000 customers. The electricity distribution to customers will continue without disruption and a total of 96 employees will continue their work in the business following the transaction.
Fortum's heat business consists of heat production and sales as well as district heat and cooling activities in Norway. Heat production capacity consists mainly of heat pumps and business-to-business heat plants with a combined capacity of 210 megawatts. In 2013, Fortum’s Norwegian heat business delivered 215 gigawatt-hours (GWh) of district heat and 63 GWhs of district cooling to its customers, who are mainly in the greater Oslo and Akershus areas. The delivery of heat and cooling to customers will continue without disruption following the transaction and all 14 current employees will continue their work in the business
Fortum's approximately 34%-shareholding in Hafslund ASA is not included in the arrangement. Furthermore, Fortum will continue to sell electricity and to develop and offer related services to its electricity retail customers in Norway as before.
Fortum’s purpose is to create energy that improves life for present and future generations. Catering to the versatile needs of our customers, we generate, distribute and sell electricity and heat, and offer related expert services. Our operations focus on the Nordic and Baltic countries, Russia and Poland. In 2013, Fortum’s sales totalled EUR 6.1 billion and comparable operating profit was EUR 1.6 billion. We employ approximately 9,500 people. Fortum’s shares are traded on the NASDAQ OMX Helsinki. www.fortum.com