Kreate has filed a compensation claim against Solwers' subsidiary

Translation: Original published in Finnish on 02/21/2025 at 08:41 am EET

The compensation claim made against Finnmap Infra is based on an alleged breach of contract. In our view, such disagreements and disputes are somewhat common, but we note that the total amount of the claim is significant relative to Solwers' current earnings and cash flow level. In Kreate's size class, the amount is moderate.

Kreate has made a claim against Finnmap Infra

Solwers announced this morning that its subsidiary Finnmap infra has received a compensation claim filed with the Helsinki District Court by Kreate. The basis of the claim is an alleged breach of performance related to the contract for the development phase of the E18 Turku Ring Road between Kausela and Pukkila.  The total amount of the claim is approximately 2.5 MEUR. In addition, Kreate has demanded the payment of party costs and legal fees.

According to Solwers, it has familiarized itself with the claim, the underlying contract, and applicable standard terms. The company considers the claim to be unfounded and will dispute the claims in their entirety,  both in terms of their basis and amount. Finnmap infra Oy will present its own claims to Kreate Oy. The parties have been in settlement negotiations since 2023.

Solwers does not see the claim having a significant impact on the group's operations. The company also has liability insurance taken out on standard terms, which is intended to cover costs incurred to the company from possible design errors.

The scale of the claim is substantial in Solwers’ size class

In our assessment, disagreements and disputes related to contracts are somewhat common, and the case does not involve any major drama. However, we note that the total amount of the claim is substantial relative to Solwers’ current earnings level and cash flow (2024e: 5.3 MEUR). Thus, such a potential large one-off item would cause a significant dent for one year if Solwers were ordered to pay the claim and the insurance did not cover the related expenses. Relative to Kreate's size, the magnitude of the matter is significantly smaller (2024e: 10.3 MEUR). We are monitoring the progress of the matter and await its resolution before making any potential forecast changes regarding the compensation claim.