Vattenfall mulls €1bn Finnish grid and heating sale

The Swedish power group is gauging market interest for the sale of its Finnish electricity network and its heat distribution business. EQT, Macquarie and a consortium of Goldman Sachs, 3i Infrastructure and Finland’s Illmarinen Mutual Pension Insurance Company are said to be interested in the sale.

Vattenfall, the Swedish power group, is appraising market interest for the sale of its Finnish electricity grid and gas heating business, a Vattenfall spokeswoman told Infrastructure Investor, without offering further details.

According to Reuters, a potential sale could net Vattenfall at least €1 billion and may be concluded before the year ends. The most attractive asset of the two being put up for sale is the regulated electricity grid, which serves 347,000 retail investors and is Finland’s second-largest electricity distributor.

Swedish private equity firm EQT and Australian investor Macquarie are said to be preparing offers for the assets, the news agency reported, adding that EQT was looking for local partners and might team up with Finnish municipalities. In addition, a consortium of Goldman Sachs Infrastructure Partners, 3i Infrastructure and Finland’s Illmarinen Mutual Pension Insurance Company are also reportedly looking to submit an offer.

Infrastructure Investor could not reach any of the potential bidders for comment.

If any of the rumoured bidders end up buying Vattenfall’s Finish assets, it would not be the first time infrastructure investors flocked to the company’s divestments. In March 2010, Australian investor Industry Funds Management (IMF) bought a 40 percent stake in Vattenfall’s German electricity grid – the third-largest in the country – in a deal that valued the network at €800 million.

Vattenfall has been selling non-core assets to help cut its debt pile, which stood at around €15.6 billion at the end of the first half of the year, according to a company report.