Russian Freight One and Finnish VR-Group Ltd. signed a shareholder agreement on Friday setting out the principles for management of their joint venture, Freight One Scandinavia Ltd, Freight One said in a statement.
Charter capital has been set at 1 million euro. Freight One and VR-Group will finance the venture 50-50 through a share subscription. No additional investment will be needed since the JV will be using the rolling stock and infrastructure of the two founders. It will finance operations out of its own revenue.
The JV was worth an estimated 17.4 million euro at the moment of its founding.
The JV will be managed by an executive director appointed by the board of directors. Freight One and VR-Group will each have two representatives on the four-member board.
The venture was set up to boost volumes for Freight One and VR-Group on export, import and transit routes between Russia and Finland. Freight One Scandinavia Ltd. will organize transportation in a number of areas: raw materials and finished goods for the timber industry, including pulp and paper; raw materials and finished products for the metalworking and chemical industries; petroleum and petrochemical production; and machinery and equipment.
Freight One Scandinavia Ltd. is to be registered in Helsinki before year-end.