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. Last Updated: 07/27/2016

Fortum Gives Up Its Stake in Lenenergo

HELSINKI -- Finnish utility Fortum said Friday that it had decided to sell its stake in power distributor Lenenergo for 295 million euros ($398 million) to a consortium of companies.

Fortum said it would book a sales gain of 230 million euros, 26 euro cents per share in its third-quarter results.

"The decision to sell the Lenenergo shares is in line with Fortum's strategy to invest primarily in Russian generation assets," Fortum said in a statement.

Fortum owns slightly more than a 25 percent stake in the northwestern generating company TGK-1.

Fortum said the buyers of its slightly over one-third stake in Lenenergo were VTB, IDE Electricity Distribution Investments 1 Ltd and Unified Energy System.

Former power monopoly UES is undergoing a major reform under which it is spinning off and privatizing its generation and distribution units, while keeping the national grid under state control.

UES will cease to exist in mid-2008 after completion of a reform designed to introduce competition and raise more cash for the sector.