FI SV EN

Privatisation

DISPOSAL OF HOLDINGS

State ownership in companies is rooted in the economic, industrial and social needs existing during the first few decades of Finland’s independence. Accordingly, the State assumed entrepreneurial risks because the private sector was either unable or willing to do so (e.g. Enso-Gutzeit and Outokumpu). At the same time, the State devolved a number of government functions to organisations established on a limited liability basis (e.g. Alko, the Finnish Broadcasting Company YLE).

Among the objectives of state involvement were to exploit raw materials; develop the country’s infrastructure; achieve self-sufficiency; secure adequate funding for business; and to attain certain regional policy goals. In the 19th century, state-owned companies played a major role in Finland’s industrialisation and the overall development of the economy.

Once the industrial basis and infrastructure of the national economy were established and there was no longer any need for the State’s entrepreneurial input to secure self-sufficiency, the role and position of most state-owned companies began to gradually change. With an increasing number of companies operating in an international competitive environment, the importance of extending the ownerships base was highlighted towards the end of the 1980s, although it was not until 1993 that this issue gained more urgency.

Unlike in many other industrialised countries, the extension of the ownership base was not motivated by ideological grounds, but rather practical considerations. In particular, the aim was to secure access to capital and improve competitiveness by getting involved in the structural arrangements made in the various sectors. The Finnish State does not have a specific policy programme for privatisation.

Under the State Shareholders and Ownership Steering Act, all decisions identifying the companies in which the State may relinquish its sole ownership (100% of the votes) or its control (minimum of 50.1% of the votes) of a given company are to be made by Parliament. All decision on the sales of shares are made by the Government.

Privatisation has been carried out by selling shares to Finnish and foreign institutional investors. Also, public offerings have been used to this end. Where possible, shares have also been issued or sold to employees. A number of extensive restructuring schemes have been implemented in addition to share issues and sales.

Since 1993, the companies concerned have raised a total of EUR 1.4 billion in venture capital from the market by expanding the ownership base. At the same time, the State has gained EUR 15.8 billion in revenues from the sale of its holdings. Most of the revenues from the sale of the State’s corporate assets have been used for the promotion of business and industry.

According to the present Government Programme, the proceeds from the sale of state assets are primarily to be used for repayment of central government debt. Up to 25%, but no more than EUR 150 million of any annual revenues exceeding EUR 400 million, may be used for projects designed to strengthen the economy and promote growth.

Disposal of holdings

The State of Finland has relinquished its holdings or at least controlling interest in the following companies:

Televa Oy

controlling interest/entire holdings

1981/1987

Ajokki Oy

entire holdings

1986

Suomen Malmi Oy

entire holdings

1991

Kokkolan Puhelin Oy

entire holdings

1991

Turun Asennuspaja Oy

entire holdings

1991

Kulinaari-ravintolat Oy

entire holdings

1993

Outokumpu Corporation

controlling interest

1994

VTKK- yhtymä

controlling interest

1995

Veitsiluoto Oy

entire holdings

1995

Valmet Corporation

controlling interest

1996

Oy Sisu Ab

entire holdings

1997

Rautaruukki Corporation

controlling interest

1997

Medivire Työterveyspalvelut Oy

entire holdings

2000

Sponda Plc

controlling interest

2000

Leonia Plc

controlling interest

2000

Partek Corporation

entire holdings

2002

Avena Oy

entire holdings

2002

Inspecta Oy

entire holdings

2002

Finnish Credit Insurance Company Ltd

entire holdings

2002

Finnish Motor Vehicle inspection Ltd

entire holdings

2003

Engel Group Ltd

controlling interest/entire holdings

1999/2004

Kemira Corporation

controlling interest

2005

Kapiteeli Oyj

entire holdings

2006

Kemira GrowHow Oyj

entire holdings

2007

Santapark Oy

entire holdings

2009

In addition, the ownership base has been expanded in companies such as Kemijoki Oy (in 1997) and Fortum Corporation (in 1998, 2002 and 2005), of which the latter was formed by combining Neste Corporation and Imatran Voima Corporation. The States retains a controlling interest in both companies.