FINLAND - Varma Mutual Insurance Pension Company has sold almost 10% of its shares in telecoms company Elisa Oyj to the Finnish government, in the completion of an earlier agreement.

In October, the €26.9bn pension fund purchased 10.4% of Elisa Oyj shares from Novator - an Icelandic alternative investment firm - at the price of €11.20 a share, making it the biggest shareholder in the telecoms company with a stake of 15.73%.

However as part of the deal for Varma to purchase the holding in the Finnish company, the pension fund was given the option to sell at least 50% of the 10.4% stake to the Finnish government at the price it originally paid, once the government had made the necessary financial arrangements. (See earlier IPE article: Varma makes tactical telecoms move)

Varma has now confirmed it has sold 9.6% of its holding in Elisa Oyj to the government for €179.2m, which equates to around two-thirds of the stock acquired from Novator in October, although this still leaves the pension insurance company with a 6.1% stake in the telecoms company.

The Finnish government said Varma had "the right to sell the shares after the third supplementary budget had been adopted by Parliament", however it admitted in the state's view "it would have been practical if the acquisition of the Elisa shares had been part of the Solidium arrangement, but given the schedule, this was not possible".

The Finnish government announced plans in October to transfer the state's holdings in eight non-strategic listed companies to the entirely state-owned holding company Solidium Oy in an effort to centralise the management of its equities and ensure the highest possible yield for the state.

However, under the proposal the company needed to be reorganised so the transfer of the state's existing holdings - in firms such as Kemira Oyj, Metso Corporation, Outokumpu Oyj, Rautaruukki Oyj, Sampo plc, Sponda Plc, Stora Enso Oyj and TeliaSonera ABcompany's - and the extraordinary general meeting to appoint a new board of directors only took place last week.

Explaining the decision to centralise the state's equity holdings in Finnish companies, Minister Jyri Häkämies, the minister responsible for matters relating to the State's ownership policy, said the arrangement was considered to be "necessary and urgent".

Häkämies said: "This is a natural continuation to the State's active ownership policy, adopted by several previous Finnish governments. The global financial crisis that has been expanding rapidly makes it even more urgent for the State to come up with a tool that can be effectively used in ensuring a Finnish ownership in Finnish key companies. This solution is a method to reach that goal. It is a way to combine the State's traditional pragmatic ownership policy with the best expertise available."

Varma meanwhile continues to be an active investor in Finland, with 34% of its listed equities based in the country - equivalent to €3.7bn - as it is seen as a "preferred partner" through its knowledge of the market, and it confirmed a Finnish investment "takes priority if the return expectations and quality criteria are met".

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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