FORTUM RAISED EURO 1.2 BILLION TO COMPLETE THE FINANCING OF THE STORA ENSO POWER ASSETS

Fortum Corporation has today agreed on the long term financial arrangements that will replace the short-term financing related to the acquisition of Stora Enso power assets.

 

Fortum Corporation’s subsidiary, Fortum Capital Limited, has issued Euro 1.2 billion of undated preference shares. Fortum Capital Limited is incorporated in Guernsey. All the preference shares have been subscribed and they carry a fixed dividend of 6.7% per annum. Fortum has simultaneously entered into interest rate swap arrangements which bring the effective cost of funding one percentage point below the fixed rate dividend in today’s interest rate environment.

 

The arrangement will be accounted for as minority interest in Fortum Group’s financial statements.

 

- We chose the most flexible financial arrangement available to underpin our strategy. The arrangement based on issuing undated preference shares enables Fortum to maintain competitive cost of capital and it considerably strengthens our capital structure. The arrangement will decrease our gearing by approximately 10%, says Eero Aittola, Fortum’s President and CEO.

 

Fortum is one of the Nordic countries’ leading energy companies. The business covers the entire energy chain, from production to refining, generation, distribution and marketing, and from energy-related engineering to operation and maintenance. Fortum’s stock is quoted in Helsinki Exchanges.

 

The preference share issue has been arranged and placed by Citigroup.

 

 

Fortum Corporation

 

 

Further information:

Eero Aittola, President and CEO, + 358 010 45 24234 

Seppo Viitanen, Treasurer, phone + 358 10 45 24477