The auction for the sale of Operail begins

Today marks the start of the auction process to divest Operail of all business segments. The sales process is carried out by the investment banking unit of LHV Bank, the legal advisor of the process is Ellex Raidla law firm.

Yesterday, 06.06.2024, the Government Cabinet approved the Ministry of Climate’s proposal to initiate a public auction to privatize all business operations of the Estonian state-owned company AS Operail. Operail’s freight and repairs businesses are for sale along with assets, licenses, contracts, employees, and the Operail brand.

"We approach privatisation with a positive outlook. The past years have been challenging for the railway sector and the economy. While overall freight volume on the Estonian railway decreased by 39% last year, Operail's volume decreased by almost 70%, for unlike our competitors, Operail ceased freight transportation to/from Russia and Belarus. Nevertheless, we have maintained the largest market share in freight transportation on the Estonian railways," states Merle Kurvits, Member of the Board of AS Operail. "The buyer will acquire a highly competent operational company with good future potential – strategic opportunities for expansion and profit generation," Kurvits affirmed.

A two-stage auction will be conducted to find a buyer, commencing on 07.06.2024. To participate in the auction, interested parties must demonstrate genuine interest and capability to purchase the asset and sign a non-disclosure agreement. In the first stage, buyers can review the initial information package and submit non-binding offers. Investors who qualify for the second stage will be provided additional information, enabling them to submit binding offers.

Operail's owner, supervisory board, management board, and employees will not participate in conducting the auction. For questions related to participating in the auction, all interested parties can directly contact the representatives of LHV Bank, whose contact details are available in the sales notice published on Operail's website.

AS Operail is a railway company with an international history, wholly owned by the Estonian state. In 2021, the owner decided to divest Operail from business segments that are not strategically necessary for the state – namely, wagon leasing and freight transportation in Finland. The divestment from these businesses was completed by the beginning of 2023, and the company continued to focus on freight transportation in Estonia and rolling stock maintenance and repair. In February 2024, the government informed the public of the plan to privatise the remaining business segments of Operail.