HELSINKI, June 14 (Reuters) - Finland’s biggest construction group YIT is confident shareholders will approve a plan to spin off its building services business, its incoming chief executive said.
Some analysts have raised concerns over the move by YIT, which is also the biggest foreign residential builder in Russia, saying the smaller market capitalisations of the resulting two companies could turn off investors.
YIT plans to split in two at the end of June and later list the services business, to be named Caverion, on the Helsinki bourse. The move aims to help the separate businesses to grow more strongly by allowing them to focus on their different fields of construction and services.
Kari Kauniskangas, who is due to become YIT’s chief executive after the planned spin-off and is currently in charge of YIT’s international construction business, said he was confident investors would approve the plan.
“I haven’t heard that anybody would oppose this plan,” he told Reuters in an interview.
The move requires backing from two-thirds of shareholders in a vote next Monday. The company earlier announced that 28 percent of voters already supported the move.
Kauniskangas said some international funds may be forced to sell their shares in the two companies after the split due to their smaller capitalisations, but added the move was worth it in the long run.
YIT’s construction business is targeting an average annual revenue growth rate of at least ten percent in coming years after the split, helped by strong residential demand in Russia.
Last year the company sold 4,200 apartments in Russia, mainly in Moscow and its surroundings as well as St. Petersburg and Yekaterinburg. Kauniskangas said he saw ample room for further growth in Russia.
“Our average market share in our cities (in Russia) is smaller than 5 percent. We have a good chance to lift it to around 10 percent in many cities, and we will also look at new cities,” he said. (Editing by Mark Potter)