Fortum to seek compensation for investments in Russia, planning arbitration proceedings

Home > Newsroom > Top Stories > Fortum to seek compensation for investments in Russia, planning arbitration proceedings - press release

Fortum to seek compensation for investments in Russia, planning arbitration proceedings - press release

MOSCOW. July 13 (Interfax) - Finland's Fortum intends to seek compensation for the value of its shares in PJSC Fortum and its investments in Russia that total several billions of euros, the energy concern said in a press release on Thursday.

Fortum expects that arbitration proceedings on the matter will be initiated at the end of 2023.

"These notices of dispute are the first step required in the arbitration proceedings, which are expected to be initiated at the end 2023. Fortum will seek compensation for the value of its shares in PJSC Fortum and its investments in Russia, amounting to several billions of euros," the company said in the press release.

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.

The Property Agency said the decree did not affect ownership issues and did not deprive the owners of their assets.

The day after the decree came out, the boards of directors of PJSC Fortum and Unipro changed their general directors, in accordance with the Property Agency's requirements. Vyacheslav Kozhevnikov of Bashneft (MOEX: Bashneft) was named as head of Fortum.

Fortum has decided following a review of results for Q1 2023 to fully write down its Russian assets and deconsolidate them in its financial statements.

The company said in a report that it had "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."

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.