TeliaSonera, aka the half-mother, can continue wringing her hands and pushing ahead any date when there will be some kind of final resolution of ownership of Lattelecom (the half-mother owns 49 %) and Latvian Mobile Telephone (LMT--where the half mother formally holds 49 %, but actually is a bigger mother through the 23 % that Lattelecom holds).
The excessively well informed Diena reporter Baiba Rulle writes that the government is considering an alternative scheme to current swap proposal (49 % of Lattelecom plus cash for the remainder of LMT) that has been under discussion since springm 2006.
The alternative scheme would involve breaking the so-called Umbrella Agreement of 1994 and requiring TeliaSonera to sell its 49 % holding in Lattelecom to a third party, preferably financial investors. At the same time, the Latvian government would be free to sell its 51 % of Lattelecom in a public share offering unfettered by the first-refusal rights of TeliaSonera under the Umbrella Agreement. That appears to be the point of annulling the much criticized document. However, as I understand it, the Latvian laws on corporations would require a first refusal right to TeliaSonera in any case.
Assuming the government gets its way, Lattelecom would be sold by both parties on the stock exchange, while the government would sell the rest of LMT to the ex-half mother, presumably, for cash. This might be a better solution for Lattelecom than having it owned by the Latvian government (whose core business should not be running a telecoms business) and it would bring a lot of cash into the state treasury.
However, the present scheme under discussion would also involve a cash payment in addition to a swap of Lattelecom holdings for the rest of LMT, and it would leave the Latvian government with the opportunity to sell 100 % of Lattelecom on the stock exchange if it chose to do so. Now the government seems to want to saddle TeliaSonera with selling its 49 % of what could be seen as an unattractive fixed-network-only operator. It is also rather presumptuous of the government to dictate what a foreign company may or may not do with its property -- in this case, 49 % of Lattelecom -- by urging it to sell to the holding to private financial investors.
One scenario that could arise, assuming the half-mother goes along with the scheme, is that it arranges to sell its holdings of Lattelecom to a future new owner of TeliaSonera, since the Swedish group itself is likely to be 100 % privatized in the near to medium term. In other words, TeliaSonera sells its 49 % of Lattelecom to say, Deutsche Telekom or Telefonica, who then buys into TeliaSonera and picks up the rest of Lattelecom on the stock exchange when the government sells its 51 %. At the end of the day, the 100 % private TeliaSonera and its new foreign parent control both Lattelecom and LMT, which is what TeliaSonera has wanted all along.