Sweden OKs Vattenfall sale of German coal plants to Czech investorsStaff writer ▼ | July 5, 2016
On April 18, Swedish government received a request from Vattenfall regarding the sale of its lignite operations in Germany.
Selling Vattenfall has been tasked with generating commercial returns
Since 2010, Vattenfall has been tasked by the Riksdag with generating commercial returns by conducting energy operations commercially so that the company is among those leading developments towards environmentally sustainable energy production.
The issue the Government has therefore had to conisder is whether the transaction is in line with the Riksdag's remit in terms of its direction and business rationale.
The Government process for handling owner coordination has been extensive. The transaction has been closely reviewed by the Government Offices with the assistance of an external financial adviser.
Vattenfall's own analyses regarding the alternative scenarios of selling the lignite operations or retaining them and continuing to run them in line with the Riksdag's business rationale requirement were also analysed in the process.
During the analysis process the Government requested more in-depth information on hedging, buyers, future commitments concerning land restoration, and any financial repercussions of such a scenario. The Government supports the proposed sale of Vattenfall's lignite operations.
The Government has analysed the proposed transaction and shares the assessment of Vattenfall's governing board that it is in line with the company's remit and the strategy whereby Vattenfall is to take the lead in developments towards a greater proportion of fossil-free electricity production.
In summary, the divestment is strategically correct and the best financial alternative. ■