(For other news from Reuters Nordic Investment Summit, click here)
By Jussi Rosendahl
HELSINKI, Sept 30 Outokumpu should
try to solve its own problems even though the steel company's
heavy debts have raised the prospect it might need more money
from shareholders at some stage, the head of Finland's state
investment fund Solidium said.
Kari Jarvinen, Solidium's managing director, told the
Reuters Nordic Investment Summit that the fund was making its
investment decisions independent of political pressure to help
out troubled Finnish companies.
"It is better that the company tries to sort out its
problems by itself. The company already had a 1 billion (euros)
right issue only one and half years ago," Jarvinen said when
asked about Outokumpu's finances. "It is paramount that these
companies find ways to be profitable in the future."
Solidium, which holds stakes in 11 Finnish listed companies
such as Stora Enso and Sampo, was founded
in 2009. Its mandate is to invest government money in businesses
deemed to be of national importance.
Solidium invested 314 million euros ($425 million) in
Outokumpu's share issue last year when the company needed money
to buy ThyssenKrupp's stainless steel unit Inoxum.
Solidium is now Outokumpu's second biggest shareholder with a
stake of around 22 percent.
But Outokumpu might need more cash. The company, like other
steelmakers in Europe, has faced weak demand as a result of
customers holding back from purchases because of falling steel
prices. At the end of the second-quarter, Outokumpu's
debt-to-equity ratio was almost 121 percent compared with 103
percent at the end of March.
Solidium earlier this year backstopped a share issue of
Talvivaara , lifting its ownership in the
troubled nickel miner to 17 percent.
($1 = 0.7385 euros)
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($1 = 0.7385 euros)
(Additional reporting by Terhi Kinnunen; Editing by Ritsuko
Ando and Jane Merriman)