Finnish energy company FORTUM declines to restart operations within Russia
In a recent twist, Fortum, the Finnish energy company, has made it clear that it's not jumping back into the Russian market. Their Q1 2025 report, available on their website, indicates this decisive stance.
"Fortum's Russian chapter is closing. When the green light arrives, we'll keep pushing the sell button for our assets over there," the report said.
Saying Goodbye to a Billion in Russian Assets
Fortum's resolve to sever ties with Russia dates back to the start of the special operation in Ukraine in 2022. Vladimir Putin subsequently signed a decree, introducing temporary external management of foreign assets. Fortum and Unipro's Russian subsidiaries were under the temporary management of Rosimushchestvo as a result[1].
As Chaos ensued, Fortum lost control over its assets, leading to a complete financial impairment and deconsolidation. In response, the company initiated an arbitration process against Russia, aiming to recover unpaid debts[1].
At their recent annual shareholders' meeting, CEO Markus Rauramo confirmed that Fortum still considers its Russian assets as theirs. However, the ongoing mystery surrounding Forward Energy, the rebranded former subsidiary, leaves management in the dark[2].
A Bitter Legal Battle
Fortum finds itself in a legal standoff with Russia, seeking compensation for its investments and the value of its shares in Fortum Energy. Furthermore, the company is pursuing legal action concerning intra-group loans worth approximately 600 million euros that remain unpaid[1].
A financial Write-off and a Waiting Game
Due to the lack of information about the operational and financial performance of its Russian assets, Fortum has written off these assets entirely and deconsolidated them from its financial statements[1]. As for resuming operations in Russia, the company doesn't hold its breath[2].
[1] Enrichment Data: (News Source 1,News Source 2)
[2] Enrichment Data: (Company Report,News Source 1)
[3] Enrichment Data: (News Source 3)
[4] Enrichment Data: (News Source 4)
- Despite Rauramo's confirmation at the annual shareholders' meeting, Fortum still holds onto the belief that its Russian assets remain theirs, amidst the ongoing mystery surrounding Forward Energy, a rebranded former subsidiary.
- The financial impairment and deconsolidation of Fortum's Russian assets were a direct response to the chaotic situation that arose following the temporary management of foreign assets by Rosimushchestvo.
- With the Russian chapter of Fortum seemingly closing, the company has resorted to investing its resources in other businesses and real-estate ventures, distancing itself from Russia.
- In an attempt to recover unpaid debts, Fortum initiated an arbitration process against Russia in 2022, aiming to secure compensation for its investments and the value of its shares in Fortum Energy.
- The uncertainty surrounding the operational and financial performance of Fortum's Russian assets has led the company to write off these assets entirely and deconsolidate them from its financial statements.
