Fortum to sell 50% share in Finnish district heating company

In the latest move in its ongoing divestment programme, Fortum has announced plans to sell its 50% stake in Finnish district heating company Riihimaen Kaukolampo Oy.

The city of Riihimäki, which is served by the company and already owns a 50% share, will purchase 40% of Fortum’s share, while Riihimäen Kaukolämpö itself will purchase 10%, at a total purchase price of €11 million. The transaction is subject to a favourable decision by the Riihimäki city council and Fortum said it expects the deal to be finalised by end 2013. 

According to NASDAQ, Fortum’s ongoing efficiency programme aims to ‘improve the company’s cash flow by more than approximately €1 billion during 2013–2014 by reducing capital expenditures, divesting approximately €500 million of non-core assets, reducing fixed costs and focusing on working capital efficiency.’

Riihimäen Kaukolämpö supplies district heat and natural gas to its customers. The company´s district heat sales were around 190 GWh in 2012.

Source: COSPP