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UPDATE 2-Finland puts shareholdings worth $7 bln in new firm

Published 12/12/2008, 05:03 AM
Updated 12/12/2008, 05:05 AM

* Finland moves holdings in 8 firms to new investment co

* Total value of holdings 5.3 bln euros

* No decision yet on purchasing Elisa stake

(Recasts, adds comments)

By Brett Young

HELSINKI, Dec 12 (Reuters) - Finland said on Friday it has moved some 5.3 billion euros ($6.99 billion) worth of non-core shareholdings to a new company to boost flexibility in both buying and selling stakes in troubled markets.

The transfer of shares to state-owned Solidium Oy makes Finland the latest country to take a more active role in markets roiled by the global economic slowdown.

With the euro zone economy in recession against the background of a global financial crisis, EU authorities and national governments are under pressure to boost investments to prop up growth.

"Now we have an active instrument for Finnish ownership," Ownership Steering Minister Jyri Hakamies told a news conference.

The minority stakes shifted to Solidium were in Kemira , Metso, Outokumpu, Rautaruukki, Sampo, Sponda, Stora Enso and TeliaSonera.

Hakamies reiterated past comments that Solidium would be both a buyer and a seller, working alone or with other domestic investors and focusing on Finnish companies. Any acquisitions would likely be funded by debt.

"(Solidium) can be a buyer, but very very moderately so," he said.

The state tapped Keijo Suila, former chief executive of Finnair, as Solidium board chairman. Other board members include Kone Chairman Antti Herlin, Sanoma Magazines head Eija Ailasmaa, and central trade union organisation (SAK) head Lauri Ihalainen.

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Suila told the press conference that the search was now on for a chief executive.

As part of its activist drive Finland has also said it wants to buy a stake in telecom operator Elisa, and it has an agreement with Finnish insurer Varma to possibly buy at least a 5.2 percent stake in the operator.

Hakamies told Reuters in October he expected a deal by the beginning of December, but on Friday he could not say when the transaction would happen or how big a stake the state would buy.

"It's a question of days or weeks, but I don't have a precise date at the moment," he said.

Varma was not immediately available for comment. ($1=.7581 euros) (Reporting by Brett Young)

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