Finnish authorities will allocate 2.35 billion euros to Fortum

MOSCOW, 6 Sep — PRIME. The Finnish energy concern Fortum has agreed with the government of the country to receive financing in the amount of 2.35 billion euros, follows from a press release from the company.

“Fortum Corporation has entered into a bridge financing agreement with its majority owner, the State of Finland (50.76% ownership), through which the company seeks to ensure access to sufficient liquidity resources if electricity prices and with them collateral requirements continue to materially grow on the Nasdaq Commodity Exchange,” the report said.

The release clarifies that the €2.35 billion funding is being provided by the Finnish state-owned holding company Solidium. The term of the loan is one year and must be fully repaid within one year from the date of signing. The first tranche of at least €350 million must be received no later than 30 September 2022 for the agreement to remain in effect thereafter. The last required tranche can be received by March 31, 2023.

Under the terms of the agreement, Solidium will have the right to subscribe for 8.97 million new Fortum ordinary registered shares, which is 1% of its share capital. As a result, the share of shares under the control of the Finnish state will increase to 51.26%, which, accordingly, dilutes the share of other shareholders.

The company notes that the bridge financing is currently carried out in accordance with the schedule and conditions set by the Finnish government, but using the arrangement is a last resort for Fortum. The agreement cannot be used to meet the needs of Fortum’s subsidiary, Germany’s Uniper. Fortum’s Nordic power generation subsidiaries Fortum Power and Heat Oy and Fortum Sverige AB are also parties to the agreement.

Fortum Corporation is a Finnish state-owned energy company. The company employs about 8 thousand specialists in several countries. The German energy company Uniper was formed on January 1, 2016 as part of the reorganization of E.ON, as a result of which the conventional energy business was spun off into a separate firm. Fortum is the largest shareholder of Uniper.