Stock exchange release


14 September 2004, 09:50 EEST

Fortum Corporation STOCK EXCHANGE RELEASE 14 September 2004 10.50 a.m. 1(2)


Not for release, publication or distribution in the United States
of America.

Fortum Corporation today announces its plan to implement the
separation of Fortum Oil Oy in April 2005 through a distribution
of Fortum Oil shares as a dividend to the shareholders of Fortum
Corporation and a marketed offering of the remaining shares to
investors. This will enable Fortum Oil to simultaneously seek a
listing of its shares. The dividend distribution is subject to an
approval by the Annual General Meeting of Fortum in spring 2005.

The proposal to distribute Fortum Oil shares as a dividend has
been facilitated by Fortum’s very strong operating performance in
both the Oil and Power & Heat businesses over the last 12 months.
It is designed to allow both Fortum Corporation and Fortum Oil to
maintain their financial strength without raising significant new
capital from the markets. Fortum Oil will be capitalised with
approximately EUR 1 billion of debt including approximately EUR
130 million of shipping leases.

Approximately 85% of Fortum Oil shares are proposed to be
distributed as a dividend making the Finnish State a direct
majority shareholder in Fortum Oil, which is in line with the
Parliamentary decision adopted in 2003. The remaining
approximately 15% of the shares are expected to be sold to
investors subject to market conditions. This will give specialized
oil investors the opportunity to invest in a leading European oil
refining and marketing company and provide capital to Fortum.
Following the dividend distribution and the proposed sale of
shares Fortum Corporation does not intend to continue as a
shareholder in Fortum Oil.

The announced plan has been based on a detailed review of
separation alternatives following Fortum’s strong operating
performance. The announced structure provides Fortum Corporation
with the most cost-efficient way to separate Fortum Oil. It also
provides full independence to both Fortum Corporation and Fortum
Oil to implement their own strategies in their respective
industries. Fortum Corporation will be left with sufficient
financial strength to implement its utility consolidation strategy
while Fortum Oil can also be capitalised to allow for the
successful implementation of its own strategy including the
upgrade of the Porvoo refinery.

“We are delighted that our strong operating performance allows us,
in a cost-efficient way to all constituents, to create two truly
independent companies, both leaders in their own industriesö, says
Mikael Lilius, President and CEO of Fortum.

“Now we are in a position to create a unique opportunity for
Fortum shareholders to join the future of Fortum Oil while the new
oil company is able to market its own strategy to new investors.
This structure is optimal for both companies and their
shareholders. It also provides execution certainty as it is less
dependent on equity market developmentsö, Mikael Lilius concludes.

Fortum will arrange a press and analyst conference in relation to
the announcement today at 1:00 pm Finnish time at its head office
in Keilaniemi, Espoo. A teleconference for international analysts
and investors will be arranged at 5:00 pm Finnish time (GMT+2). To
listen to the call please dial +44(0)1452 568060.

Fortum Corporation
Carola Teir-Lehtinen
Senior Vice President, Corporate Communications

For further information please contact
Carola Teir-Lehtinen, tel. +358 10 452 4118
Juha Laaksonen, CFO, tel. +358 10 452 4519

Helsinki Exchanges
Key media

The information contained herein is not for publication or
distribution into the United States. The material set forth herein
is for informational purposes only and is not intended, and should
not be construed, as an offer of securities for sale into the
United States. The securities described herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, or the laws of any state, and may not be offered or sold
within the United States, except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and applicable state laws. There is no
intention to register any portion of the offering in the United
States or to conduct a public offering of securities in the United

The information contained herein shall not constitute an offer to
sell or the solicitation of an offer to buy, nor shall there be
any sale of the securities referred to herein, in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration, exemption from registration or qualification
under the securities law of any such jurisdiction.