All change for Lattelecom sell-off?

11 Jan 2008

According to the Financial Times Latvia’s new government is considering scrapping the LVL290 million (USD609.5 million) buy-out of fixed line incumbent Lattelecom by a consortium led by Blackstone Group and opening up the company’s privatisation to other bidders. Prime minister Ivars Godmanis’ cabinet, which last month won a vote of confidence, is reported to be planning to discusss other options for the privatisation, including keeping a majority stake or selling to the highest bidder.

Last July, the previous government – comprising the same coalition of parties – agreed to buy back the 49% of Lattelecom owned by TeliaSonera, and sell the entire group to the management without a tender. In return, TeliaSonera – whose hopes of acquiring Lattelecom were dashed by Latvia’s government on competition grounds – would take full ownership of LMT, Latvia’s largest mobile operator by subscribers, in a transaction valued at LVL668 million. TeliaSonera already owns 49% of LMT and has management control. In September the government also approved the financing of the Lattelecom management buy-out by Blackstone, which would invest LVL90 million to take a 51% stake, with UniCredit, Nordea Bank, Parex Bank and DnB Nor providing loans for the remaining LVL200 million.

Latvia, Tet (Lattelecom Group)