Latvian government will not rush to sell Lattelecom, LMT holdings

21 Mar 2011

The Latvian government is ‘not in a hurry’ to offload its holding in either fixed line incumbent Lattelecom or its mobile subsidiary Latvijas Mobilais Telefons (LMT), Bloomberg reports. According to the state it does not intend to sell off its stake in either operator should the price offered be below that which it was offered for the holding in mid-2007, with prime minister Valdis Dombrovskis stating that: ‘In that case, we’d rather wait for better market conditions to sell our property.’

According to TeleGeography’s GlobalComms Database, in September 2007 private equity group Blackstone said it would invest LVL90 million (USD178 million) to take a 51% stake in Lattelecom, but while the deal was due to be completed within a few months of the announcement, in January 2008 Latvia’s new government was reported to be considering scrapping the entire deal and opening up the company’s privatisation to other bidders. A month later TeliaSonera tendered LVL500 million for the outstanding shares in both Lattelecom and LMT, while Blackstone offered to buy TeliaSonera’s stake in Lattelecom for LVL142 million. Subsequently, in March 2008 an agreement was reached under which TeliaSonera would hand over its 49% stake in the fixed line incumbent to the government, with it receiving a 23% stake in LMT in exchange, as well as the option to buy two further stakes of 5% from the government’s privatisation agency and the 23% held by Lattelecom. Despite the deal being given regulatory approval in April 2008, with a view to being completed before the end of that year, the country’s economic crisis conspired to halt the sale, and in March 2009 it was revealed that the process faced further delays, with the new cabinet opting to postpone the privatisation plans.