Consideration of Fortum’s claim for compensation for assets in the Russian Federation may begin at the end of the year
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Finnish Energy Corporation Fortum reported about his intention to seek compensation through the courts for the value of his shares in the Russian subsidiary and investments in Russia.
The company has already filed a notice of dispute, the first step in an arbitration due to begin later this year. Russia, as stated in the statement of the Finnish company, allegedly violated its obligations under investment agreements under bilateral investment agreements concluded with the Netherlands and Sweden.
Fortum will seek compensation for the value of its shares in PJSC Fortum and its investments in Russia in the amount of several billion euros.
On April 25, Russian President Vladimir Putin signed a decree on a mechanism for introducing temporary management of foreign assets in Russia. According to the document, the external management of the Federal Property Management Agency was introduced in relation to the Russian subsidiaries of Fortum and Unipro (Germany). The decision was made in response to unfriendly actions by Western countries, including sanctions and the blocking of Russian assets.
On May 11, Fortum announced writing off Russian assets worth 1.7 billion euros. The company clarified that investments in the Russian business amounted to about 6 billion euros, taking into account the purchase of shares. EBITDA of the regional segment since 2008 has been fixed at over 4 billion euros. According to Fortum’s calculations, the net cash loss from investments in Russia, acquisitions of enterprises and dividends reached 2 billion euros.
Fortum’s assets include power plants in Western Siberia and the Urals (former TGK-10), as well as a 29.5% stake in the generating company belonging to the Finnish energy concern TGC-1 (controlling stake – at “Gazprom energy holding). The total capacity of Fortum power plants is 4.67 GW, electricity generation in 2022 is 31.1 billion kWh.
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