There is a purchase and sale agreement for Estonian national rail operator Operail. It is Tiigi Keskus, an Estonian real estate company that also owns a wheat and rye facility in the city of Tartu, that is the lucky winner of the sale competition. The transaction is to be finalised in the coming months.

“The signing of the purchase and sale agreement is an important milestone, and I want to thank all parties for their quick and correct contribution to the privatisation of Operail,” said Estonian infrastructure manager Vladimir Svet. The country opted to privatise the rail operator after a decline in business performance, especially in light of the loss in Russian freight transit.

“However, a significant part of the work is yet to be done after obtaining various approvals, and therefore the auction cannot be declared finished today. We can provide additional comments on the sales process, as well as the exact price and terms of the transaction when the transaction is finalised,” minister Svet added.

Synergies with other business

Earlier, Tiigi Keskus pointed out that a takeover of Operail might enhance synergies with Tartu Mill’s portfolio, which the company also owns. Tartu Mill operates Estonia’s largest grain mill and has a presence in Latvia as well, which could be fertile ground for Operail’s new life. “We plan to continue to provide high quality freight and rolling stock repair services in Estonia and also to expand geographically,” a board member from Tiigi Keskus told Estonian media.

The Estonian government decided to put Operail for sale last February, with the procedure starting four months later. The main reason behind this choice is that western sanctions on Russia and Belarus took too big of a toll on the company’s profitability. Moreover, representatives of the government highlighted the lack of a need to have a state-owned rail freight operator in a landscape where private players are already doing a good job. Currently, Operail employs around 200 people.