Tiigi Keskus subsidiary confirmed as buyer of Estonia’s state-owned rail freight operator.
ESTONIAN state-owned rail freight operator Operail signed an agreement on October 31 to sell the business to RailProject, a subsidiary of Tiigi Keskus, an Estonian asset management company primarily focused on property.
Tiigi Keskus was confirmed as having made the best binding offer for the freight operator on October 17, prompting the start of final negotiations to sign the sale and purchase agreement.
The Estonian government confirmed plans to privatise Operail earlier this year, with the public auction commencing in June. Shortlisted bidders entered a period of detailed negotiations in August.
The purchase includes Operail’s freight and maintenance businesses along with assets, licences, contracts and the Operail brand, as well as a workforce of around 200 people.
“The signing of the sale and purchase agreement is an important milestone, and I want to thank all parties for their quick and correct contribution to the privatisation of Operail,” says Estonia’s minister of infrastructure, Mr Vladimir Svet.
“However, a significant part of the work is yet to be done as we still require various approvals, therefore the auction cannot be declared finished today. We can provide additional comments on the sale process, as well as the exact price and terms of the transaction, when the transaction is finalised.”
Operail has been facing financial difficulties after its traffic fell by 70% last year as it ceased moving freight to and from Russia and Belarus. Rail freight traffic was down 39% overall in Estonia in 2023.
Nevertheless, Operail retains the largest overall share of the rail freight market in Estonia and the company said during the sale process that it hopes the buyer will work to develop international business. The company is already active in the Finnish market through its Operail Finland subsidiary.
