FORTUM AND STORA ENSO SIGN AGREEMENT ON STORA ENSO’S POWER ASSETS

Fortum shall acquire Stora Enso’s power plant capacity in Sweden and Finland, corresponding to a total of 1,511 megawatts and 6.7 terawatt-hours of annual production. Fortum has agreed on electricity deliveries and power portfolio management services to Stora Enso. Simultaneously, Birka Nät AB shall acquire Stora Enso’s regional network in Sweden.

 

Based on the letter of intent signed on 27 January 2000, Fortum and Stora Enso have today agreed that Fortum will acquire Stora Enso’s power assets outside mills. The asset value of the transaction is SEK 14.20 billion (about EUR 1.7 billion). Stora Enso’s regional network, which will be acquired by Birka Nät, is located within the central part of Birka Energi’s distribution network. Birka Nät is a subsidiary of Birka Energi AB, a 50/50 owned joint venture of Fortum and the City of Stockholm. The asset value of this transaction is SEK 1.65 billion. Altogether, the asset value of the transactions is SEK 15.85 billion.

 

The parties have also agreed on electricity deliveries to Stora Enso mills in Sweden. The agreed annual volume is more than 2 terawatt-hours over the next three years.

 

In addition, Fortum and Stora Enso have agreed on power portfolio management services including electricity deliveries and risk management related to electricity procurement. At first, the agreement concerns Stora Enso’s electricity deliveries in Finland. The objective is to extend the co-operation.

 

To finance the transaction Fortum has agreed on credit facilities up to EUR 1.5 billion. These facilities will also cover other financing needs of Fortum. The short-term tranche of the facilities, EUR 900 million, will be replaced later this year by a new financing structure designed to strengthen the balance sheet. For the current year, the transaction and the related restructuring measures as planned should not have an impact on earnings per share.

 

Within this transaction, a total of 165 people will transfer to Fortum from Stora Enso in Sweden.

 

The completion of the transaction is subject to the approval of the competition authorities of Sweden and Finland. The closing is expected to take place later this spring.

 

- This acquisition is a unique opportunity to increase the share of hydropower in our power generation portfolio and it will improve Fortum’s competitiveness in our most focal market area in the Nordic countries. The acquisition rationale is based on the future competitive edge of hydro and nuclear power, which are free of greenhouse gas emissions and, on our estimate on the development of electricity prices in the Nordic market, says Eero Aittola, President and CEO.

 

Fortum Corporation

 

 

Antti Ruuskanen

Corporate Executive Vice President, Communications

 

DISTRIBUTION

The Helsinki Exchanges

Key media

 

FURTHER INFORMATION

Eero Aittola, President and CEO,

tel. +358 10 45 24234

Tapio Kuula, Corporate Executive Vice President, Power and Heat,              tel. +358 10 45 24112

 

Maps and other material is available at www.fortum.com.