Fortum completes spin-off of Norway electric distribution business
The transaction is estimated to be completed by the end of June 2014
Fortum completed the divestment of its Norwegian electricity distribution business to the Hafslund Group, listed on the Oslo Stock Exchange. The transaction has all the necessary regulatory approvals and the customary closing conditions have been met.
In April, Fortum also announced the divestment of its heat businesses in Norway to iCON Infrastructure Partners II, L.P. fund. The transaction is estimated to be completed by the end of June 2014.
The total consideration including both deals is $463 million on a debt- and cash-free basis of which about $272 million relates to electricity distribution transactions, which was completed with Hafslund.
As announced April 8, Fortum expects to book a one-time sales gain totaling about $95.5 million from all Norwegian transactions, corresponding to about $1 per share, in its second quarter 2014 results.
A total of 84 employees will continue their work in the sold business. The electricity distribution of the business' nearly 103,000 customers will also continue without disruption upon closing. Fortum will continue to sell electricity and to develop and offer related services to its electricity retail customers in Norway as before.
The decision to divest Fortum's Norwegian electricity distribution business is linked to the strategic assessment of the company's electricity distribution business' future alternatives last year. In its heat business, Fortum will focus on bigger urban areas providing the possibilities to develop combined heat and power (CHP) production.