August 17th, 2007
Fortum sells its shares in Russian Lenenergo
Fortum has decided to sell its stake - slightly over 1/3 of shares - in JSC Lenenergo for approximately EUR 295 million. The buyers are VTB Bank, I.D.E. Electricity Distribution Investments 1 Ltd and the Russian energy company RAO UES.
As a consequence, Fortum will book an after tax gain of approximately EUR 230 million, corresponding to EUR 0.26 per share, in its third quarter financial results.
The decision to sell the Lenenergo shares is in line with Fortum's strategy to invest primarily in Russian generation assets. The current business of Lenenergo is electricity distribution in the city of St. Petersburg and the Leningrad Region.
The generation assets of the original Lenenergo were integrated to the north-western Territorial Generating Company, TGC-1, in 2006 as a part of the Russian power sector reform. This company operates in a large area, from St. Petersburg to the Kola Peninsula. The production capacity of TGC-1 is about 6,000 MW power and about 17,000 MW heat. More than half of the power generation capacity is hydro power. With its slightly over 25% stake, Fortum is the second largest shareholder of the company.
Senior Vice President, Corporate Communications
Tapio Kuula, Senior Vice President, Fortum Corporation, +358 50 452 4112
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