Operail CEO refutes media accusations: “Operail Finland sold at fair price”
The CEO of Operail, Merle Kurvits, has responded to media attention for Operail Finland’s sale. Estonian media recently said Operail Finland’s sale was a 12 million euro “gift” to the Finnish rail industry. Kurvits refutes the accusations of underselling, saying that Operail sold the subsidiary at a fair price.
Operail sold its subsidiary Operail Finland to Nurminen Logistics in 2022. Nurminen Logistics acquired Operail’s Finnish branch for a total of 27,7 million euros. The vast majority – approximately 18 million euros – covered a loan for the purchase of locomotives. The remaining 9,2 million euros were Operail Finland’s net assets.
Earlier, Estonian media reported that Operail had undersold its Finnish subsidiary by 12,3 million euros. The buyer, Nurminen Logistics, valued Operail Finland’s assets at 12,3 million euros more than the sale price after the transaction.
To make matters worse, the sale reportedly took place “under the cover of secrecy” without involving the public or Estonian railway businessmen. As public competitions usually yield better results, “the Estonian state gave a gift of 12 million euros to Finnish railway businessmen,” according to Eesti Ekspress.
The CEO responds
Operail’s CEO, Merle Kurvits, responded to the controversy on LinkedIn. According to her, the transaction price of 27,7 million euros was fair. Due to the rapid implementation of sanctions against Russia at the time of the sale and faltering freight volumes, the business situation was volatile. Increased commercial risk had an effect on the value of Operail Finland, according to Kurvits.
Kurvits also notes that the value growth, which Nurminen Logistics registered after the acquisition, cannot be considered a loss on the sale. “The value of the company sold by Operail at the time of sale was 27,7 million euros, but a year after the sale, the market situation in Finland has stabilized, the new owner has been able to significantly increase the volumes of goods and make the company more profitable. This also gave the new owner the opportunity to revalue the property.”
Sale process
Lastly, Kurvits commented on the sale process, which was mired in accusations of secrecy. “Operail carried out the sales process correctly. The sale of a company through an auction, organized by a neutral professional financial advisor, is a standard and good practice for transactions of this size. All financial decisions have been monitored by the supervisory board and the owner. The correctness of the process is confirmed by an external audit,” Kurvits said on LinkedIn.
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