Research Update: Fortum Oyj 'BBB' Rating Affirmed On Russian Regulatory Approval; Outlook Negative As Material Uncertainties Remain

We expect Finnish power group Fortum Oyj to increase its stake in Uniper SE to 69.6% from 49.99%, now it has achieved all of the necessary regulatory approvals. The second tranche, a minimum of 1.0% and a maximum of 3.8% of shares, is due to be closed within two months after the first tranche's closure. With the approximately €2.3 billion transaction up to a maximum of €2.6 billion, Fortum adds significant scale to its power-generation portfolio. Over 2020 and 2021, we expect Fortum to undertake significant credit remedy measures, including continued material asset disposals and flexibility to substantially reduce capital expenditure (capex), to strengthen its balance sheet to a level required to maintain the current rating. This shows Fortum's strong

...- We expect Finnish power group Fortum Oyj to increase its stake in Uniper SE to 69.6% from 49.99%, now it has achieved all of the necessary regulatory approvals. The second tranche, a minimum of 1.0% and a maximum of 3.8% of shares, is due to be closed within two months after the first tranche's closure. With the approximately 2.3 billion transaction up to a maximum of 2.6 billion, Fortum adds significant scale to its power-generation portfolio. - Over 2020 and 2021, we expect Fortum to undertake significant credit remedy measures, including continued material asset disposals and flexibility to substantially reduce capital expenditure (capex), to strengthen its balance sheet to a level required to maintain the current rating. This shows Fortum's strong commitment to the current rating. - We are affirming our '###' long-term issuer credit rating on Fortum. - The negative outlook reflects volatile market conditions, declining power prices, and the execution risk related to Fortum's ongoing...

Research Update