The holding company Alexela Energia is seeking to purchase 50 percent of the Kiviõli Oil Shale and Chemical Processing Plant. The sale is awaiting confirmation from the Competition Authority.
Speculations of selling the plant have been circulating for years. Earlier this year, the owners reportedly offered it to Alexela for 63 million euros, but potential buyers said it was only worth half that. There were risks involved as well, as Kiviõli's limited technological capabilities cannot be utilized for processing finer oil shale.
The plant has also been a topic of controversy. In 2008, Kiviõli said it was running out of shale reserves. The situation deteriorated into a messy dispute for mining rights with landowners and the government. In several instances, the plant's owners threatened to shut it down and leave its home town of 7,000 with 650 fewer jobs, and without a source of heating and electricity.
The deal with Alexela Energia seems to be good news for the plant, although the price of the purchase will not be disclosed.
Owned by Toomas and Raivo Tamm, the Kiviõli plant posted a net turnover of 23 million euros and profit of 7 million euros last year.
"Using Alexela's experience, we believe that we can support the development of Kiviõli on the international raw materials market, and aid the company with additional investments to increase production capabilities," said Alexela Chair of the Supervisory Board Heiti Hääl.
Robert Karpelin will continue to run the plant, but Alexela will also have a representative, Juhan Parmas, in management.
Alexela Energia has stakes in Alexela Oil and Reola Gaas. The company's affiliates are also planning an LNG storage terminal in Paldiski.