(Reuters) – Finland’s five-party government has agreed to sell Destia, a state-owned road and rail construction company, to private equity firm Ahlstrom Capital as it looks to reduce borrowing and boost competition in the sector.
The government confirmed a Reuters report of the deal earlier on Monday and said it was worth 148 million euros ($202 million).
Destia, with annual sales of around 500 million euros, competes with companies such as YIT, NCC and Skanska, as well as VR Track, another state-owned company.
The company has slashed jobs and sold assets in the last few years to shore up profitability in a weakening Finnish construction market. Last year, its core operating profit rose slightly to 19 million euros.
The Finnish government agreed in March to raise around 1.9 billion euros from asset sales in 2014-2015 as it looks to reduce borrowing.
Pressure from labor unions has limited sell-offs in recent years. The state still owns stakes in 15 of Helsinki’s top listed firms such as Sampo and Stora Enso.
Ahlstrom Capital recently took part in a rescue package of steel firm Outokumpu along with the state.