Estonian Operail sells Finnish business to Nurminen Logistics
The Estonian state-owned company Operail sold its Finnish subsidiary, Operail Finland, to Nurminen Logistics. The company, active in Finland since 2020, decided to proceed with the sale in 2021 in a move unrelated to Russia or the war in Ukraine. The purchase cost Nurminen Logistics 27,7 million euros.
The deal is yet to be approved by the Finnish authorities, even though the parties involved do not expect any major hick-ups. “We were, and still are, the first company to offer serious competition in the Finnish railway sector,” commented Ilkka Seppänen, who has been the CEO of Operail Finland since day one. “Operating in Finland has provided invaluable experience to Operail as a company and an opportunity to bring together the best knowledge and practices from the markets of different countries,” said Operail’s CEO, Raul Toomsalu.
Withdrawal planned for more than a year
Since the war in Ukraine began and the sanctions came in place, Operail has been trying to cut off its Russian and Belarusian ties like other Baltic railway companies. However, the withdrawal process from Finland, which is to be seen separately from the transport of Russian and Belarusian goods, started in May 2021.
Operail withdraws from Finland for “reasons of liberal government politics. The Estonian state has no reason for doing business in Finland; this business is appropriate for the private sector”, said the company to RailFreigh.com last December.
Private sector worked out in the end
Indeed Operail’s Finnish subsidiary ended up in the private sector as the company wished. Nurminen Logistics, a prominent Finnish and international logistics company, will take Operail Finland into its hands. As Operail reassured, “no changes will occur to the daily operations and staff of Operail Finland in connection with the change of ownership”. This means that the 40 employees of the company will be directly integrated with Nurminen’s staff.
Besides human resources, Nurminen will also take over Operail’s assets. “Operail Finland has nine powerful Wabtec Powerhaul freight locomotives and one C30-MF shunting locomotive built in Estonia. The new owner will receive a well-managed and fully operating company with considerable freight volume and a strong prospect for future returns. We wish them every success and growth in the rail freight business,” added Toomsalu.
Geopolitics affected the sales process
Despite Operail not selling its Finnish subsidiary due to the impact that the Russian invasion of Ukraine had on its business, it underlined that the whole geopolitical situation directly affected the sales process. “The overall market situation for 1,520 mm gauge railways deteriorated significantly in 2022. Instead of selling the initial 51 per cent holding, we decided to exit the Finnish market completely and to do so promptly,” explained the company.
“It has been a very complex sales process. While it was initially uncertain whether we would be able to sell the company at all or whether we would have to close it down and sell the assets, the better scenario worked out in the end. The sales price covers all obligations,” concluded Toomsalu.
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