13 Apr 2023 15:53

Fortum sees interest in Russian assets not only in country itself

MOSCOW. April 13 (Interfax) - Fortum continues to exit Russia, seeing interest in its assets not only in Russia itself but also from other countries, a senior top manager of the Finnish energy company said during its annual meeting.

The senior manager said the process of exiting the Russian market was ongoing, and there was interest in Fortum's business in the Russian Federation from Russia and beyond.

Fortum CEO Markus Rauramo said later during the AGM that the company could not continue to do business in Russia, its departure was needed for the company's business to continue in general. "A deal will happen, but I can't say when exactly," he said, recalling that the government's permits were needed for a deal.

The new Fortum strategy unveiled at the beginning of March does not include business in Russia. The company continues the process of withdrawing from Russian assets, considering their sale to be the preferred option.

Fortum said in a financial report for 2022 that the current geopolitical situation poses a risk to its controlled exit from Russia if the divestments cannot be finalized or are severely delayed. The company also pointed to risk that a "transaction materializes at a lower valuation of the business or, in an extreme case, expropriation of Fortum's Russian assets."

Fortum, one of the largest foreign investors in Russia's electricity sector, said in May that it planned to leave the Russian market. Market participants told Interfax that the company was collecting offers to buy its assets and planned to make a decision by the beginning of July, but there have been no announcements of any deals since then.

Fortum Oy owns 98.23% of PJSC Fortum (formerly TGK-10), Fortum also holds around 30% in Russian power company TGK-1 , the principal shareholder of which is Gazprom Energoholding.