Fortum launches 1.5-2 bln euro sale of Finland grid -sources

STOCKHOLM/LONDON, Sept 16 Mon Sep 16, 2013 11:38am EDT

STOCKHOLM/LONDON, Sept 16 (Reuters) - State-controlled Finnish utility Fortum has launched a sale of its power grid in Finland, which could fetch around 1.5 billion to 2 billion euros ($2.67 billion), four people familiar with the matter said.

Last week, information on the business was sent to prospective buyers, inviting first round bids in mid-October, the sources said. They declined to be identified because the process is not public.

They said a sale of the Finnish business could be completed this year, whereas that of the larger Swedish grid, which could fetch between 3 billion to 4 billion euros, would likely happen next year.

Fortum also has a smaller distribution business in Norway. Two sources said Fortum had hired Nordea to sell that part, worth around 300 million to 500 million euros, in a separate process. Fortum and Nordea declined to comment.

Sources told Reuters this spring that Fortum had hired Citigroup and Danske Bank to explore a sale of its electricity distribution business in Sweden and Finland, worth an estimated 5 billion euros in total.

Several consortiums comprising infrastructure funds attracted to the steady and stable returns generated from regulated assets are forming to assess a possible bid. These include Macquarie, First State and Borealis, Hastings and Munich Re, Chinese State Grid and CKI, two of the sources said.

A separate consortium comprising 3i infrastructure, Goldman Sachs infrastructure, IFM (Industry Funds Management), GIC (Government of Singapore Investment Corporation) and ADIA (the Abu Dhabi Investment Authority) are considering teaming up to bid for the Swedish business, two of the sources said.

All of the potential bidders either declined to comment or did not return requests for comment.

A sale would be part of a trend where European energy firms offload their networks to cut debt and focus on power generation and renewable energy as EU directives require them to relinquish control over their grids.

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