The Latvian government has approved a management buy-out of the fixed network operator Lattelecom, in which it holds a 51 % stake. 49 % of Lattelecom is owned by Sweden's TeliaSonera.
The MBO will net the government around LVL 290 million.
Lattelecom's management proposed the MBO to break a deadlock in privatization talks between the Latvian state and the Swedish telecommunications group. TeliaSonera initially wanted to buy 100 % in both Lattelecom and Latvian Mobile Telephone(LMT), but the government said last year it would not sell Lattelecom to the Swedes. Valuations were then made of both Lattelecom and LMT in the hopes of a deal where TeliaSonera would swap its 49 % share of Lattelecom plus cash for 100 % of LMT. It currently controls just over 60 % of the mobile operator. That would have left the government holding 100 % of Lattelecom, but the proposed deal stalled.
Unbelievable, but the government --so says my Lattelecom source, this ain't on the wires yet -- has finally made a decision.