Gasum sells its local distribution network to SL Capital Partners – strategic focus on Nordic gas network development
22 June 2015
Gasum is selling its local distribution networks. The shares of the Gasum Oy subsidiaries Gasum Paikallisjakelu Oy and Helsingin Kaupunkikaasu Oy will be acquired by private markets specialist, SL Capital Partners (“SL Capital”), funded through SL Capital Infrastructure I LP (“SLCI I”), its infrastructure fund.
The transaction is part of Gasum’s strategy to focus on the development of the Nordic gas market and energy infrastructure through environmentally friendly solutions. Gasum has invested in the liquefied natural gas (“LNG”) distribution infrastructure and is focusing strongly on increasing the market for Finnish and renewable biogas. LNG offers an excellent opportunity for reductions in transport emissions on land as well as at sea. Biogas helps achieve even larger carbon dioxide emission cuts than natural gas.
Gasum Paikallisjakelu Oy is in charge of local gas network operations in twelve areas in Finland, and Helsingin Kaupunkikaasu owns the Helsinki natural gas network. The transaction will involve the employees of both companies continuing in their current positions.
Gasum is now giving up ownership of the distribution network, but maintains the supply contracts with gas customers. The customers will continue to receive their gas delivered with a single contract without any actions on their part. Gasum will also take care of sales to new customers and customer service.
SLCI I is a long-term investor focused on core infrastructure assets and this local gas distribution business represents a key investment for the fund. SLCI I recognises the critical importance of this business and will place an absolute priority on continuing to provide a safe and secure supply of gas to all customers. It is also fully committed to the continued investment program initiated by Gasum to replace older pipes and upgrade the network.
Looking forward, SL Capital will work closely with Gasum to grow the business, connecting new customers and encouraging greater use of gas throughout southern Finland.
Roger Pim, Managing Partner of SL Capital commented
"This local gas distribution business represents an excellent first investment for our fund. As a regulated utility in a safe and stable economy it fits squarely with our strategy to invest in core infrastructure across northern Europe. We are very pleased to be working in partnership with Gasum to further develop this business for the future."
Dominic Helmsley, Managing Director Infrastructure, added
"We are delighted to be selected by Gasum as their long-term partner to take over the ownership of Gasum Paikallisjakelu and Helsingin Kaupunkikaasu and look forward to a successful ongoing relationship with them over many years."
The agreement has been signed today and is expected to be completed within approximately one week.