Operail started the process of selling non-strategic assets as part of a partial privatization that began 1.5 years ago. At the same time, the company decided to privatize the wagon rental business, the locomotive construction and repair business and the cargo transportation business in Finland, reports Railway Supply citing Railway Pro.

Operail

The plan was to sell the business to a strategic or financial investor with no intention of going public. Superia, an independent company specializing in large transactions, was hired to manage the entire process.

In connection with the outbreak of war in Ukraine in February 2022, the sale of companies was suspended, and instead, the sale of assets was recognized as the best strategy in the new situation.

Operail’s asset sale process is standard, as very large and specific assets are almost always sold through a competition organized by a dedicated advisor, inviting only those parties who have real money and interest to participate.

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The offer was sent to 35 investors. Almost half of them made an initial offer, 8 of which will continue the process.

The process is transparent and documented, but disclosing details during the sale process doesn’t make sense from a business standpoint, the company says. The goal is to sell the assets in the most profitable way for the state.

According to the company information from May 2021, a decision was made to transfer non-strategic areas of the group activities, i.e. all activities that do not include freight transport by Estonian railways. Last year, the Operail group went through preparations for privatization, which necessitated restructuring within the group. As a result of this process, all separate activities of Operail (freight transport in Estonia, freight transport in Finland, rental of rolling stock, maintenance and repair of rolling stock) are legally separated.

As part of this process, Operail intends to transfer 51% of its railcar rental business and identify and select a new owner for 41% of the company next year. Teede Tehnokeskus will be handed over to the government, which is expected to receive 5 million euros for its sale.

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