Stock exchange release


14 September 2004, 9:50 EEST

14 September 2004 10.50 a.m. 1(2)

FORTUM OIL SEPARATION THROUGH A SHARE DIVIDEND AND A SALE OF SHARES 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 Distribution: 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 States. 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.