On May 11, 2004, Standard&Poor's Ratings Services affirmed its 'BBB+/A-2' credit ratings on Finland-based energy company Fortum Oyj, following its announcement of an agreement to buy the City of Oslo's 54% stake in Norway-based utility Hafslund ASA. The outlook is stable. The ratings affirmation reflects the expectation that Fortum's financial profile will remain adequate for the rating level, despite the addition of about €2.1 billion of debt to its balance sheet. The additional debt comprises the €660 million acquisition cost and about €1.4 billion of acquired debt. The acquisition will strengthen Fortum's Nordic utility operations. The effect on business risk is marginally positive, given Hafslund's greater focus on distribution operations, and the resulting more balanced generation and supply
