The Estonian state-owned railway company Operail has signed the contract of sale of its subsidiary Operail Finland, which provides freight transport services in Finland. The new owner will be the Finnish publicly traded logistics company Nurminen Logistics. The sales price is 27.7 million euros as the result of the sales process competition.
A contract of purchase and sale which was concluded at the end of 2022 and will take effect after Finnish authorities will approve the deal. This will be followed by a transition period, during which Operail will hand over all Operail Finland activities to the new owner. No changes are planned to the daily operations and staff of Operail Finland in connection with the change of ownership.
Operail Finland has nine powerful Wabtec Powerhaul freight locomotives, one C30-MF shunting locomotive built in Estonia, and over forty employees. According to Operail’s CEO Raul Toomsalu, the new owner will receive a well-managed and fully operating company with considerable freight volume and the strong prospect for future returns. “We wish them every success and growth in the rail freight business!” Toomsalu added.
Operail started freight services in Finland two years ago, at the end of 2020. Ilkka Seppänen, who has been the CEO of Operail Finland for its entire existence, added that it was thanks to Operail that the Finnish rail freight market came to life: “We were, and still are, the first company to offer serious competition in the Finnish railway sector.”
“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 Toomsalu, in looking back at the years spent in Finland. “We have trained Finnish employees in Estonia and Estonian employees have visited Finland to learn how things work there.”
The decision to sell the company was not related to Russia’s aggression in Ukraine. Already in May 2021, the owner of Operail decided to start exiting from Finland, as it is not strategically necessary for the Estonian state to do business in other countries. Business is thriving in the free market, in the hands of private owners.
Russia’s aggression in Ukraine has nonetheless affected the sales process. The overall market situation for 1,520 mm gauge railways deteriorated significantly in 2022. Instead of selling the initial 51% holding, it was decided to completely exit the Finnish market and to do so promptly.
“It has been a very complex sales process. In spite of a completely unpredictable environment, the people of Operail have been working almost around the clock to meet the guidelines of the owner. While at first, it was 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. Many thanks to the whole Operail team for this,” said Toomsalu.