A Latvian government-appointed working group has decided the state does not need to privatise incumbent telco Lattelecom and mobile operator Latvian Mobile Telephone (LMT) and is looking at other options to boost their value, including a merger.
The…
A Latvian government-appointed working group has decided the state does not need to privatise incumbent telco Lattelecom and mobile operator Latvian Mobile Telephone (LMT) and is looking at other options to boost their value, including a merger.
The working group – which includes economic, financial and transport ministers – has evaluated a variety of possible corporate governance models for the operators, in which Sweden’s TeliaSonera also holds stakes, according to a Ministry of Economic Affairs statement.
One option would see the companies combined, with the state retaining a controlling stake.
The working group has sent drafts of its report to other involved ministries, requesting input. Latvia’s Cabinet will then need to decide which option best suits the state’s interests and initiate discussions with the shareholders.
Latvia owns 51% of Lattelecom, while TeliaSonera owns the remaining 49%. Lattelecom owns 23% of LMT, in which the state has a 39.7% interest and TeliaSonera a 60.3% stake.
TeliaSonera eyes greater stake
A TeliaSonera spokesperson said the company is aware Latvia is considering merging the two operators, but noted it has not held talks with the government on the matter and is awaiting an invitation.
“We’re interested to have this discussion with the government, but it hasn’t happened yet,” the spokesperson said, adding TeliaSonera believes that, in general, such a merger could create “interesting synergies”.
The spokesperson added that the company could “very well” still be interested in boosting its stake in the Latvian businesses and gaining majority ownership.
He said he could not comment on the likely timeframe for a potential transaction, but noted there could be an important development “fairly soon”.
He also stressed that TeliaSonera is committed to its operations in Latvia and other Baltic states and intends to stay there.
In 2008, Latvia rejected TeliaSonera’s offer to take over Lattelecom and LMT for LVL500m (US$951m as of today) on the grounds that it could damage competition.
