Stock exchange release


12 December 2003, 14:26 EET

Fortum Corporation Stock Exchange Release 12 Dec. 2003 1(2)

- preference shares issued by Fortum Capital Ltd. to be redeemed

The Board of Directors has decided to redeem the preference shares
issued by Fortum Corporation’s subsidiary, Fortum Capital Limited.
The redemption will take place on 30 December 2003. The preference
shares, worth EUR 1.2 billion, were issued in connection with the
financing arrangements related to the acquisition of Stora Enso
power assets in June 2000. Fortum will finance the redemption with

All of the preference shares have carried a fixed dividend of 6.7%
per annum. The interest rate swap arrangements that Fortum
simultaneously entered into has brought Fortum's effective cost of
funding below the fixed rate dividend. The proceeds of the bond
offering made by Fortum in early November with favourable market
terms will be used for the redemption. As a result, a slightly
lower level of financing costs will be achieved.

The arrangement has been accounted for as a minority interest in
Fortum Group’s financial statements. In the consolidated income
statement and balance sheet, the effect of this minority interest
has been approximately EUR -80 million and EUR 1.2 billion
respectively. These amounts will be replaced by approximately
similar amounts in financial expenses and interest-bearing
liabilities. The impact on the balance sheet will materialise as
of the redemption date, and the impact on financial expenses as of
2004. Impact on the amount of net debt has already been taken into
account in calculating the adjusted gearing ratio disclosed in the
Interim Financial Statements. The redemption will improve the
return of equity ratio, whereas the return of capital employed
will remain unchanged.

Fortum expects this transaction to have no effect on its credit

Fortum Corporation

Carola Teir-Lehtinen
Senior Vice President, Corporate Communications

Further information:
Juha Laaksonen, CFO, tel. +358 10 452 4519
Seppo Viitanen, Group Treasurer, tel. +358 50 452 4477

Helsinki Exchanges
Key media


Impact of the redemption on Fortum Group's key figures

The unaudited Combined Pro Forma Financial Information set forth
below is presented to illustrate the consolidated results of
Fortum as if the redemption of the preference shares had taken
place on December 31, 2002. The combined unaudited pro forma
financial information has been given solely for illustrative
purposes and due to its nature does not as such provide a true
picture of Fortum Group's financial position or results.

Unaudited                           Last  Adjustments       Last
                                  twelve                  twelve
                                 months,                 months,
                                 Q3,2003                Q3,2003,
Net financial expenses    MEUR      -262       -80 *)       -342
Minority interests in     MEUR       -80           80          0
income statement
Earnings per share        EUR       0.86            0       0.86
Net cash from operating   MEUR     1,755          -80      1,675
Net cash from financing   MEUR    -1,943           80     -1,863
                                 Q3/2003                Q3/2003,
Equity per share          EUR       7.30            0       7.30
Minority interests in     MEUR     1,449   -1,200 **)        249
balance sheet
Net debt                  MEUR     4,420        1,200      5,620
Gearing                   %           58           30    88 ***)
Equity-to-assets ratio    %           47           -7         40
ROCE                      %         10.6            0       10.6
                          %         10.5          0.7       11.2

*) Not including the expected slightly lower funding cost.
**) Nominal value of preference shares
***) The pro-forma gearing is the same as adjusted gearing
disclosed in the published Interim Report January-September 2003