Jump to content

Vapo sales its shares in Mustankorkea Oy

Vapo Oy and the City of Jyväskylä have concluded an agreement under which the City of Jyväskylä will pay Vapo Oy around EUR 8 million for Vapo’s 55% stake in Mustankorkea Oy, a specialized waste-processing company. When it goes through, the transaction will add over EUR 5 million to the operating profit of Vapo Oy this year. The transaction still has to be approved by Jyväskylä’s city council. The city board already gave its approval for referral to the council on 7 May 2012. 

The strategy of Vapo Oy is to release capital by selling non-core items on its balance sheet. Vapo has owned its shares in Mustankorkea Oy, which specializes in waste management and composting etc., since the company was founded in 1997. The company’s other owners are the City of Jyväskylä (36.6%), the municipality of Laukaa (5.8%) and the municipality of Muurame (2.6%). The company had turnover of EUR 10.8 million in 2011 and just under 20 employees. The company’s operating result for 2011 before appropriations and taxes was EUR 2.8 million. 

“In connection with the review of strategy conducted at Vapo last year we concluded that waste management is no longer a core activity. We began negotiations with several potential buyers of Mustankorkea and I am satisfied that, based on an overall evaluation of the bids, the buyer is our long-term shareholder partner, the City of Jyväskylä, which following our negotiations is ready to propose acceptance of the share transaction to the city council”, says the CEO of Vapo Oy, Tomi Yli-Kyyny

According to Yli-Kyyny, the transaction negotiated with Jyväskylä is a reasonable package and is acceptable from Vapo’s point of view. The negotiated agreement respects the shareholder agreement made when Mustankorkea was established, under which the present owners have a priority claim to any shares sold. The transaction is significant for Vapo since it strengthens the company’s cash flow after a financially difficult year. 

“We believe that in the current situation, being fully in the municipal sector gives Mustankorkea the best conditions to develop its business and serve its customers”, Yli-Kyyny says. 

According to Esko Martikainen, the Managing Director of Mustankokea Oy, the ownership restructuring announced now is very positive from the company’s perspective. “This arrangement clarifies our ownership basis and our position in the waste management sector. The entire waste management sector is currently in the midst of change, and outside Finland the trend has been towards strong regional municipal-owned waste companies. We want to be part of this trend and ensure that the waste management of our shareholders and municipal customers operates cost-effectively and in accordance with tightening environmental requirements. The arrangement also means that if necessary the company will be able to take on future waste management service tasks under the municipalities’ responsibility”, Martikainen says. 

For further information please contact: Ahti Martikainen, Director, Communications and Public Affairs, Vapo Oy, tel. +358 40 680 4723