Latvia's Supreme Court remanded to itself (with a different panel of judges) a case dealing with ownership of 23 % of Latvian Mobile Telephone (LMT). This means that a final decision as to who has effective ownership of a slice of Latvia's most profitable mobile operator will be put off anywhere from a month (at best) to sometime next year.
That, in turn, means that the government cannot dispose of these LMT shares and is unable to deal with TeliaSonera's proposal to buy out all remaining government holdings in LMT and fixed-network operator Lattelekom. As has been mentioned earlier on this blog, the government game plan will be to offer a swap of LMT holdings for a 100 % state interest in Lattelekom, so that it can be sold as a stand-alone wireline operation to anybody but TeliaSonera. The court decision has now thrown a wrench into the whole process
The Supreme Court was ruling on an appeal of a decision that returned ownership of the 23 % participation to the Latvian state, but granting "custody" to the Latvian State Radio and Television Center (LVRTC). The litigation started in 2003 when the state sought to take away the holding in LMT from the Digital Latvian Radio and Television Center (DLRTC), a subsidiary of the LVRTC formed about five years ago to implement digital broadcast television with initial financing from the 23% share of LMT dividends. All this fell apart when the goverment of Prime Minister Einars Repse declared the digital TV project to be a massive fraud and started arbitration proceedings to have its international contracts with a little known British company, Kempmayer Media Limited (KML), annulled. At the same time, the state sought to take away the holding in LMT (in addition, the Ministry of Transport owns 5 % of the mobile operator, something not in dispute) from the DLRTC, essentially dooming the company to eventual extinction (it is being kept alive as a party in litigation with KML).
This doesn't leave many choice for Telia Sonera. One is to just wait... Yet another would be to buy Lattelekom (which also holds 23 % of LMT), thereby securing 72 % of LMT and let the government and the courts deal with WTF* will own the disputed 23 %. However, the government doesn't want to sell Lattelekom to TeliaSonera. Perhaps a deal can be worked out to buy out Lattelekom's 23 % LMT share, giving Lattelekom enough cash to buy itself back from the Swedes. A job for the financial engineers here?
*WTF - Who the F**k