Elering Signed a Contract for the Acquisition of 51.38% of Võrguteenuse Valdus’ Shares

On Monday, Elering AS signed a contract with Fortum Heat and Gas OY for the acquisition of a 51.38% share of AS Võrguteenus Valdus granting Elering control over the natural gas system operator from January 1, 2015. The agreed purchase price is 27.5 million euros.

Võrguteenus Valdus is a holding company created in the beginning of 2014 whose only business activity is holding 100% of the shares of AS EG Võrguteenus, the gas transmission system operator in Estonia.

In order for the deal to be closed in the beginning of 2015, several preconditions will need to be met. The Estonian Competition Authority will need to approve the merger since Elering is to acquire control over the company. The Estonian Ministry of the Interior will need to confirm that Elering meets the internal security conditions required from the owner of the gas transmission system. In addition, shareholders of AS Võrguteenuse Valdus will need to confirm not using their pre-emption right to purchase the shares belonging to Fortum. The goal of the parties to the contract is to meet the preconditions by the end of this year in order to the share to be transferred to Elering at the beginning of 2015.

The transaction will not influence the gas transmission tariff.

According to Taavi Veskimägi, Chairman of Elering’s Management Board, it is Elering’s strategic goal to become an integrated electricity and gas transmission system operator. „Merging the activities of the electricity and gas transmission businesses will generate synergy and add value to both the clients as well as the owner. Naturally, we cannot forget the potential for improved security of supply for the Estonian energy consumers, especially in critical situations,“ Veskimägi noted.

Last year, the profits of EG Võrguteenus in the field of gas system operation amounted to 9.1 million euros and the EBITDA was 5.7 million euros. The company’s assets amounted to 55.7 million euros, and equities to 55.2 million euros. The length of the gas transmission network administered by EG Võrguteenus is approximately 900 km.

Elering is Estonia’s independent and standalone transmission system operator, whose main task is to ensure that Estonia’s consumers enjoy a consistent, high-quality electricity supply. To ensure the security of supply, Elering maintains and develops the domestic transmission network and external interconnections. Elering manages Estonia’s electricity system in real time, ensuring the functioning of the transmission network and the balance between output and consumption.