Fortum Sells Stake in Fortum Oslo Varme AS
Posted on 03/22/2022
Fortum signed an agreement to sell its 50% ownership in the district heating company Fortum Oslo Varme AS in Norway to an investor consortium comprising Hafslund Eco AS, Sweden-based Infranode AB, and HitecVision. The total consideration for Fortum’s share is approximately NOK 10 billion on a cash and debt free basis (approximately EUR 1 billion based on current currency rate) and as part of the transaction, Fortum will deconsolidate a related NOK 2 billion loan from the City of Oslo. The consideration is based on a 100% enterprise value of NOK 20 billion (approximately EUR 2 billion). Fortum expects to record a tax-exempt capital gain of approximately EUR 0.6 billion in the City Solutions segment’s results in connection with closing of the transaction. The transaction is subject to approval by the Oslo City Council (Bystyret), necessary regulatory approvals and fulfilment of the customary closing conditions. The closing of the transactions is expected during the second quarter of 2022.
Fortum Oslo Varme is jointly owned (50/50) by Fortum and the City of Oslo.
Fortum Oslo Varme is the largest supplier of district heating in Norway and supplied 36% of district heating generated in Norway in 2021. It sold 1.8 TWh of district heating and generated 0.1 TWh of electricity with a comparable EBITDA of EUR 88 million, with very marginal impact on EPS. Fortum Oslo Varme’s waste-to-energy plant at Klemetsrud, Oslo is Norway’s largest with a capacity to end-treat 315,000 tonnes of waste per year. The company employs approximately 200 people. In 2017, Fortum became the owner of Fortum Oslo Varme in the Hafslund transaction.
Over the past years, Fortum has divested several of its heating and cooling businesses.
In 2020, Fortum divested its district heating businesses in Joensuu and Järvenpää in Finland, and in 2021, Fortum sold its district heating businesses in the Baltics and its 50% ownership in Stockholm Exergi in Sweden. In the case of Fortum Oslo Varme, Fortum was approached by the buyer. Following a thorough internal assessment, a decision was taken to divest the 50% ownership.