Fortum CEO discussed Uniper investment restriction with Russia's Putin

OSLO (Reuters) - Fortum’s chief executive officer has met with Russian President Vladimir Putin to discuss a key ownership restriction that is preventing the Finnish firm from taking control of German utility Uniper, it said on Tuesday.

Government-controlled Fortum has a 49.99% stake in Uniper, but is prevented from raising its holding as Russian authorities have said a license owned by Uniper’s Unipro must not be majority-owned by a foreign state-owned entity.

Changing the regulation could pave the way for Fortum to take full control of Uniper and break a long-standing deadlock that has also frustrated activist funds Elliott and Knight Vinke, which together hold nearly 23% of the German firm.

The discussion occurred at an event for foreign investors hosted by Putin at the St. Petersburg Economic Forum last week, a Fortum spokeswoman said in an emailed statement to Reuters.

“At the event (Fortum CEO Pekka Lundmark) did raise the point that we have a restriction limiting any possible future investments into Uniper based on a negligible water treatment activity that Uniper conducts at one of their power plants in Russia,” she added.

Fortum declined to elaborate on the discussions.

Interfax news agency reported that Russia’s Economic Development Minister Maxim Oreshkin told reporters he was instructed by Putin to discuss with Fortum possible changes to the restrictions that block the firm’s investments.

Additional reporting by Christoph Steitz in Frankfurt; Editing by Terje Solsvik and Mark Potter