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Wärtsilä exits two-stroke engine jv with CSSC

Wärtsilä exits two-stroke engine jv with CSSC
Finnish engine manufacturer Wärtsilä is exiting a joint venture for two-stroke engines with China State Shipbuilding Corp (CSSC) and take writedowns in the second quarter.

Wärtsilä said it was transferring its 30% ownership in the Winterthur Gas & Diesel jv with CSSC to the Chinese shipbuilder and taking a EUR 21m ($23.8m) writedown on the transaction. CSSC owns the other 70% of the Winterthur Gas & Diesel

The company said that two-stroke engines had prior to the divestment been classified as discontinued operations.

The joint venture with CSSC was established in July 2014 and the transaction for the 30% stake was valued at EUR46m then.

At the time Wärtsilä said: “CSSC shares our vision for the future of the 2-stroke marine engine market, and we feel that this agreement will benefit both parties as well as the entire shipping sector.”

The EUR21m writedown on the jv forms part of around EUR59m in writedowns by the engine manufacturer in the second quarter, which also EUR17m for its previously announced restructuring programme and the remainder on Brazilian Real exchange rate losses.