Fortum fully writes down Russian assets in amount of 1.7 bln euros, deconsolidates them

MOSCOW. May 11 (Interfax) - Fortum has decided to fully write down its Russian assets and deconsolidate them in its financial statements, the Finnish energy company said in its report for the first quarter of 2023.

Fortum will record an estimated impairment of approximately 1.7 billion euros. Fortum's total equity stood at 9.8 billion euros at the end of March 2023, the company said.

"We have consistently sought an exit from the Russian market since last spring and applied for permission to sell the operations to both Russian and international buyers without success. Justifying the seizure of our assets with the need to protect Russian energy security is just a guise," Fortum President and CEO Markus Rauramo was quoted as saying.

The Russian president issued a decree at the end of April to introduce temporary management of Fortum's and Uniper's Russian assets. The decree applies to 83.73% of shares in PJSC Unipro and 98.23% of shares in PJSC Fortum . The Federal Property Agency was designated the temporary manager.

Fortum said later that it considered Russia's actions to be a "crude violation of international law and of Fortum's rights as a foreign investor" and was "preparing to take all necessary measures to protect its rights under relevant international legislation."

Fortum, one of the largest foreign investors in Russia's electricity sector, owns 98.23% of PJSC Fortum and about 30% of PJSC TGC-1 , the principal shareholder of which is Gazprom Energoholding (GEH). The Finnish company was also one of the largest investors in Russian wind power.

Fortum CEO Markus Rauramo said in April this year that the company was continuing the process of exiting Russia and saw interest in its assets both in Russia and other countries.