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2017-04-26 07:30:01 CEST 2017-04-26 07:30:01 CEST REGULATED INFORMATION Fortum - Inside informationFortum and City of Oslo restructure ownership in Hafslund and announce partnership for a greener OsloFORTUM CORPORATION STOCK EXCHANGE RELEASE 26 APRIL 2017 8:30 EEST Fortum and the City of Oslo have entered into an agreement to restructure their ownership in Hafslund ASA, one of the largest listed power groups in the Nordic region. The transactions are subject to approval by the Oslo City Council (Bystyret), the necessary regulatory approvals and fulfilment of the customary closing conditions. The closing of the transactions is expected during the third quarter of 2017. Fortum will sell its 34.1% stake in Hafslund ASA to the City of Oslo for approximately EUR 730 million before the proposed dividend for the Annual General Meeting 2017. Fortum will book a one-time tax-free sales gain totalling approximately EUR 330 million, which corresponds to EUR 0.37 earnings per share. The final gain will be determined at the closing of all transactions and will be reported in Fortum's Other segment. Fortum will acquire 100% of Hafslund’s current Markets business area, which operates in Norway, Sweden and Finland. This will almost double Fortum's number of electricity retail customers in the Nordics – from 1.3 million to 2.4 million. Hafslund’s Heat business area and the City of Oslo’s waste-to-energy company Klemetsrudanlegget AS (KEA) will be combined into one company, forming an integrated value chain in the waste-to-energy system. Fortum will acquire 50% of the combined company. The combined entity will be owned 50/50 by Fortum and the City of Oslo, with Fortum having operational responsibility. Heat and KEA will be consolidated as a subsidiary to Fortum, with a 50% minority interest. In addition, Fortum will acquire 10% of Hafslund’s current Production business area. The total debt-free price of the acquisitions is approximately EUR 970 million. The combined net cash investment of the transactions is expected to be approximately EUR 240 million. In 2016, the combined consolidated Sales and EBITDA of Hafslund Markets and Heat & KEA (on a 100% basis) were approximately EUR 950 million and approximately EUR 130 million respectively. More details of the transactions are found as an attachment to this release. Green partnership "We are forming a strong partnership with the City of Oslo in areas where we can combine competences to drive innovation for a greener Oslo, one of Europe’s fastest growing urban areas. At the same time, we want to enable people and businesses to make more environmentally friendly choices. KEA is also a contender for Norway’s carbon capture and storage pilot programme, and I believe that together with Fortum, its position will be stronger," says Pekka Lundmark, Fortum’s President and CEO. "In electricity retail the combination of Hafslund and Fortum will have significant scale benefits, which will enhance the development of new technologies and services for customers. The proposed transactions support Fortum’s strategic growth and cash flow ambitions. We are naturally very excited to be able to develop sustainable solutions for yet another major European city. Our strategy implementation will continue and we still have significant financial headroom available for market consolidation," Pekka Lundmark concludes. "We are very pleased to have Fortum as our industrial partner in district heating and cooling and waste-to-energy. Together we will better be able to develop new technologies for sustainable and smart solutions for Oslo and its inhabitants," says Raymond Johansen, Governing Mayor of Oslo. Fortum Corporation Sophie Jolly, Vice President, Investor Relations and Financial Communications Additional information:
Pekka Lundmark, President and CEO, and Markus Rauramo, CFO Sophie Jolly, Vice President, Investor Relations and Financial Communications, tel. +358 10 453 2552 Webcast/teleconference for analysts and investors 27 April 2017 An international teleconference and live webcast, for institutional investors and analysts, regarding the transactions and the January-March 2017 results, will be arranged on Thursday 27 April 2017 at 16.00 EEST. To participate in the teleconference, please dial in some five minutes before the scheduled time: European callers: +44 (0)330 336 9412 US callers: +1 719 325 4746 Confirmation code: 3832411 Distribution:
Nasdaq Helsinki
Hafslund
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