Fortum Oyj: Fortum grows in poland

Fortum has signed a contract with the city of Wroclaw in Poland regarding the acquisition of a majority holding in the city's district heating company MPEC Wroclaw S.A. Fortum has also issued a public tender offer for all outstanding shares in the company. The acquisition is an important step in implementing Fortum's growth strategy. After the acquisition Fortum will have three heating companies in Poland, with aggregate net sales of more than 110 million euro and annual heat sales of 3400 gigawatt-hours (GWh). MPEC Wroclaw is a listed company with net sales of 70 million euro and annual heat sales of 2100 GWh in 2004. The company employs 260 people. By virtue of the contract, Fortum undertakes to purchase the preferred and ordinary shares held by the city that jointly grant a majority in the MPEC Wroclaw S.A. The city of Wroclaw will sell shares representing 48.7% of the share capital and 70.1% of the voting rights. Together with a share transaction completed earlier this year, the acquisition will increase Fortum's holding in the company to 53.7% of the share capital and 73% of the voting rights. Fortum has issued a public tender offer for all minority shareholders in the district heating company as well. The sales price of each ordinary share is PLN 9.6 and the price of each preferred share is PLN 13.6. Fortum will pay a total of PLN 275.4 million (i.e. 70.5 million euro) for the shares held by the city of Wroclaw. Fortum will additionally pay up to PLN 182.6 million (i.e. 46.7 million euro) for the minority shareholders' holdings if they accept the offer. According to the legislation applicable to the privatisation of public companies, the employees of MPEC Wroclaw are entitled to receive 8.6 % of the share capital as a consequence of the acquisition. Employees may not sell these shares before two years have passed after the completion of the acquisition. Fortum will negotiate the purchase of shares with employee representatives. "Poland is an important market area and we participate actively in the privatisation of its heat sector. Wroclaw is the fourth biggest city in Poland and the acquisition of its heat distribution company is an important step to Fortum", says Senior Vice President Timo Karttinen from Fortum.

(Source: Fortum Corporation)