Monday, October 09, 2006

LMT sale decision on government agenda

It appears the Latvian Cabinet of Ministers (the government) will put the sale/swap of Latvian Mobile Telephone (LMT) to Sweden's TeliaSonera on the agenda of its regular meeting October 10.
Minister of Economics Aigars Stokenbergs indicated to this blogger that the issue would be on the agenda, even though an appraisal of LMT and Lattelecom has not been completed.
The government decision would clear the way for the Ministry of Transport (owns 5 % of LMT) and the Latvian State Radio and Television Center (owns 23 % of LMT) to divest their holdings in the mobile phone operator.
Carnegie, the Swedish finance company, and Ernst & Young Baltics are working on a consensus pricing of both telecommunications companies so that LMT can be sold in a swap of participation shares/cash deal for TeliaSonera's 49 % holding in Lattelecom. Lattelecom would then (temporarily?) become a wholly state owned company. The appraisal should be completed soon.
Since the previous government coalition was more or less re-elected, it is unlikely that there will be any change of policy regarding the sale of LMT to the Swedes and the decision not to sell Lattelecom. If Lattelecom becomes a state company, it appears less likely that it will fall under a completely loonie-tunes government now that the election results are in. In effect, the decisions on privatizing the remaining state holdings in LMT will be made by a lame-duck but same duck government.

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