Investment company to be set up for state-owned enterprises

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In conjunction with a proposed supplementary budget, Parliament will soon be presented with a major change in state corporate ownership. The state plans to revive its long-dormant Solidium company, and to turn it into a tool of active state ownership policy.
      Solidium is to include all companies in which a majority of the shares is in state hands, with the exception of three companies considered strategically important: the airline Finnair, the power company Fortum, and Neste Oil.
      “It will be made into an efficient tool of blue and white ownership policy”, explained Minister of Defence Jyri Häkämies (Nat. Coalition Party), who is also the minister responsible for state corporate ownership. He was speaking at a press conference on Tuesday.
     
The company is to buy and sell shares, and if need be, it borrow money for the deals. Solidium will seek to make a profit, out of which it hopes to pay dividends into the state coffers.
      The need to borrow is likely to come true soon after the company is launched. Solidium will be launched with shares of eight listed companies worth EUR 5.573 billion, but selling them in the current market situation is unlikely to happen in a company that hopes to maximise return.
      The companies are paying dividends - last year to the tune of EUR 656 billion - but not until next spring. Before that, Solidium needs to borrow money to operate on the markets as a buyer.
      Solidium will hold shares of Kemira, Metso, Outokumpu, Rautaruukki, Sampo, Sponda, Stora Enso, and TeliaSonera.
     
The first purchase is also in the cards. the pension insurance company Varma bought shares of the telecommunications company Elisa that had been sold by the Icelandic investment company Novator. Solidium plans to buy the Elisa shares from Varma.
     
It appears that Elisa meets the goals set for Solidium, which Häkämies defined as securing Finnish ownership in nationally important companies “either alone or together with other domestic instances”.
      However, Häkämies also said that the first option of Finnish national ownership is a domestic decision determined by market conditions, without state involvement. It might be questionable whether or not the Elisa deal meets this conditions.
      The third domestic telecommunications operator DNA has said that it is just such a private option: it held discussions with Novator on buying the Elisa stock, but was left in second place, behind the state-Varma combination.
      “I have a different view on this than DNA. No such DNA option ever existed”, Häkämies said.
     
Another 25 unlisted state companies, including such key players as the electricity grid operator Fingrid, postal service provider Itella, the power company Kemijoki, the armaments manufacturer Patria, the railway comany VR, and the Finnish Seed potato Centre will not be made part of Solidium, and will remain with the state’s ownership steering unit.
      Häkämies emphasised that the changes will be implemented in cooperation with Parliament. the government will wait for the supplementary budget, and the Solidium matter to be ready in Parliament in early December.
      After that, Solidium will get a board of directors composed of outside experts, which will look for a new CEO.
      The current CEO of Solidium is Raimo Korpinen. The company was first established in connection with the recession of the 1990s, and was used by the state to place shares of Tampella held by Skopbank after the bank fell into the lap of the Bank of Finland.
     
With its 25 employees, Solidium has recently dealt with special tasks of the real estate business, which are now being moved to a new company, now that the name Solidium is to be used for different kinds of operations.


Previously in HS International Edition:
  DNA holding talks with Icelandic investor on Elisa shares (8.10.2008)
  Insurance Supervisory Authority has no objections to Varma acquisition of Elisa stock (15.10.2008)
  DNA piqued at state role in sale of Elisa shares (14.10.2008)
  Monday: Pension insurers Varma buy Icelandic stake in Elisa (13.10.2008)

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