Estonian state-owned railway company Operail has sold its freight transport service provider subsidiary Operail Finland to Finnish publicly traded logistics company Nurminen Logistics for €27.7 million.
The purchase and sale agreement (PSA) was concluded at the end of 2022 and will enter into effect following the approval of the deal by Finnish authorities, Operail said in a press release Friday.
This will be followed by a transition period during which Operail will hand over all Operail Finland activities to the new owner. No changes are planned to daily operations or to Operail Finland staff in connection with the change of ownership.
Operail Finland has nine powerful Wabtec Powerhaul freight locomotives, one Estonian-built C30-MF shunting locomotive and more than 40 employees.
According to Operail CEO Raul Toomsalu, the new owner will be receiving a well-managed and fully operating company with considerable freight volumes and strong prospects for future returns.
Operail first began offering freight services in Finland in late 2020. Ilkka Seppänen, who had served as CEO of Operail Finland for its entire existence, added that it was thanks to Operail that the Finnish rail freight market came to life.
"We were — and still are — the first company to offer serious competition in the Finnish railway sector," Seppänen highlighted.
According to the company, the decision to sell its Finnish subsidiary was not related to Russia's aggression in Ukraine; Operail's owner had decided in May 2021 already to start exiting from Finland, as it isn't strategically necessary for the Estonian state to do business in other countries.
Russia's ongoing war in Ukraine nonetheless affected the sales process, however, and the overall market situation for 1,520 mm gauge railways deteriorated significantly in 2022. Instead of selling the initial 51 percent holding, it was decided to exit the Finnish market altogether, and to do so promptly.
"It has been a very complex sales process," Toomsalu acknowledged. "In spite of a completely unpredictable environment, the people of Operail have been working nearly around the clock to fulfill the owner's guidelines. While it was initially uncertain whether we would be able to sell the company at all or whether we would have to close it down and sell the assets, in the end, the better scenario worked out. The sales price covers all obligations. Many thanks to the whole Operail team for this."
Editor: Aili Vahtla