Competition Authority approves Utilitas takeover of Tallinna Soojus
Estonia's Competition Authority has authorized the energy group Utilitas to take over the City of Tallinn-owned Tallinna Soojus, a prerequisite for the planned establishment of a joint venture between Utilitas and the city.
This May, the City of Tallinn and OÜ Utilitas signed a cooperation agreement on the creation of AS Utilitas Tallinna Soojus, a joint-stock company and joint venture in district heating which will be 33.34 percent owned by the city and 66.66 percent by Utilitas.
The City of Tallinn made a non-monetary contribution to the new company with shares of Tallinna Soojus, while Utilitas contributed with shares of Utilitas Tallinn.
Going forward, both Utilitas Tallinn and Tallinna Soojus will be subsidiaries of the new joint venture.
In October 2001, an enterprise lease and operation agreement was concluded between AS Tallinna Soojus and AS Tallinna Küte — now AS Utilitas Tallinn — based upon which Utilitas has managed and developed the district heating network for the past 22 years.
Under this contract, the lessee, Utilitas Tallinn, would have had to return the leased property to the city at the conclusion of the 30-year contract, while the city would have been obligated to compensate for the company's investments in the network.
According to the city, this would have cost them hundreds of millions of euros.
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Editor: Aili Vahtla
