Finnish city of St. Michel boosts his battered economy by selling energy companies

City of St. Michel faces the possibility of quickly leaving years of economic stagnation behind him. The council now plans to sell a minority stake in its energy company to investors, which will generate millions in interest savings annually.

street. Michel, who alone owns Södra Savolax Energy (ESE), is close to completing the sale. According to Mayor Jan Kinnunen, the decision on the sale of the minority stake is expected to be made on October 30.

street. Michel is selling 49% of the energy company, and the buyer was selected after bidding and negotiations earlier this summer.

Buyer candidates are gathering

The city expects revenue from the sale to reach 180 million euros, which is also equivalent to the amount of St. Louis. Michel’s own forecast for a budget surplus this year.

The decision to sell the minority stake will be made by the municipal council, to which the municipal council granted decision-making authority earlier this summer.

In recent months, the buyer candidate has conducted a so-called “due diligence” process on the company, where the selling target is carefully reviewed.

The buyer’s identity remained confidential throughout the process. Earlier, it was reported that major regional energy player Suur-Savon Sähkö did not reach the final stage of the bidding process.

To promote st. For Michel’s economy, a new stabilization plan will be used in addition to the sale of energy. This plan is expected to save about three million euros.

Impotence

– The financial implications of energy sales and the savings plan are of the same magnitude, says Jan Kinnunen.

street. Michel suffers from a previous accumulated deficit of more than 40 million euros. Without covering this deficit, St. Michel is on the list of “cities in crisis.”

According to Mayor Jan Kinnunen, the goal is to break the debt cycle in 2025 and balance expenses and income the following year.

However, the current stabilization plan is relatively small in comparison and will not, for example, result in layoffs or dismissals of workers.

Savings are planned

The stabilization plan was developed through collaboration between officials, staff and policy makers. The municipal council will make the final decision in December.

The largest savings, nearly two million euros, are obtained in the area of ​​education and social care. The scope of services, number of groups, staff and teaching hours are carefully reviewed.

The Civic Institute and Library offerings are also reduced. By intensifying cooperation between the Mikael Concert and Convention Hall and the city orchestra, savings are also being sought.

Source: Yale Outreach