12 May 2022 16:06

Energy Ministry doesn't expect Fortum's exit from Russia to impact work of power stations

MOSCOW. May 12 (Interfax) - Fortum's exit from Russia and corresponding changes in the charter capital of local companies "will not affect the operation of power stations in the territory of the Russian Federation," Russian Energy Minister Nikolai Shulginov said on the ministry's Telegram channel.

"Fortum's withdrawal from the main shareholders of companies located in Russian jurisdiction is an independent decision of shareholders. Changes in the structure of Fortum's shareholders will not affect the operation of power stations in the territory of the Russian Federation," Shulginov said.

"Uninterrupted energy and heat supply" in regions of operation will continue to be further provided "in full," he said.

Finnish energy company Fortum said on Thursday that it plans to stop doing business in Russia. In addition to the previously announced suspension of new investment and financing for its Russian subsidiaries, Fortum is "preparing for a controlled exit from the Russian market," Fortum CEO Markus Rauramo said in a company report. "As the preferred path, this decision includes a potential divestment of Fortum's Russian operations," he said.

Fortum owns 98.23% of PJSC Fortum , formerly TCG-10, in Russia and around 30% of PAO TGC-1 , whose main shareholder is Gazprom Energoholding. Fortum also owns 73.4% of Uniper, which itself owns 83.73% of its Russian subsidiary Unipro . The company also participates in a number of renewable energy projects. It has 7,000 employees in Russia.

"The divestment process for Uniper's Russian subsidiary Unipro is also expected to be resumed as soon as possible," Rauramo said. These processes could take some time and require regulatory approval, the company said. Nonetheless, the company has decided to stop using the Fortum brand in Russia, Rauramo said.

Fortum's planned exit from charter capital will not affect company activities or the work of staff, will not impact the company's stable financial and technological position, and will provide for the further development of the Russian subdivision. The Russian company is operationally and financially independent and is continuing normal work and to fulfill the obligations it has taken on, PJSC Fortum CEO Alexander Chuvayev said.

Changes with respect to cessation of the use of the Fortum brand will be reported additionally as the relevant decisions are made, Chuvayev said.

Fortum earlier reported 2.1 billion euros in losses connected to the company's activities in Russia in the first quarter of 2022.