Friday, November 30, 2007

Lattelecom CEO's fate in the balance

The owners of Lattelecom, TeliaSonera (49%) and the Latvian government (51%) were discussing on November 30 the fate of CEO Nils Melngailis and two other executives whose mandates expire December 10. A decision, based on the recommendations of the owners, will come next week (after December 3) at the earliest.
According to my sources, the Swedes, by not objecting to Melngailis plans for a management and staff buy-out of Lattelecom have indirectly declared that they want to keep Melngailis as CEO and not upset the status quo. TeliaSonera can only gain by getting out of its nearly-stranded investment in the fixed-line operator and getting a full 100% of Latvian Mobile Telephone (LMT) The government, however, seems to be considering dumping Melngailis, possibly as a way to back out of the MBO for reasons, so to speak, that lie beyond conventional reasoning.
The deal has already been shaky since the Latvian government's present crisis (prime minister Aigars Kalvitis has set an on-again, maybe off-again resignation date of December 5), which arose for reasons unrelated to the Lattelecom deal. If it goes down (rather than goes down :) ), Melngailis would resign anyway.
As to what happens next - I would say -- Nils gets an international position somewhere, with the usual hassles of moving residence and family, while Lattelecom faces the consequences of what can only be described as a typical, but in this case, very large-scale Latvian clusterfuck. TeliaSonera continues to sing the role of the half-mother Agonistes in this increasingly bizarre telco opera.


Anonymous said...

TeliaSonera the most dangerous infrastructure to fair business in Baltics. Corruption and bribery is their way of doing business.

Bleveland said...

"...TeliaSonera the most dangerous infrastructure to fair business in Baltics. Corruption and bribery is their way of doing business..."

Says who..? Please prove that :-)
Let's assume your allegations are correct then TeliaSonera came to exactly the right place didn't they? Corruption and bribery, that's the name of the game in Latvia. Just review the events around Lattelecom as Juris has been reporting them (and not to mention mr. Lembergs affairs...).

On the other side of the Baltic Sea we are just experiencing a typical Swedish clusterfuck. Ericsson, a company that has been doing very well and actually still is doing rather well, went into “the trap of convenience” with a leadership remaining seated too long. No doubt CEO Svanberg did good work, but he should have left when his job was done about 2 years ago. Well, to cut a long story short, the stock has recently been going down by roughly 50% in less than a month time. All of a sudden the good work and personal cult around “the Swan” –a nickname for Svanberg- is forgotten and the losers of the stock market want to see him hanged.

In other words, I guess, Ericsson should be looking for a new management team (the position of CEO may already have been taken though). As for Nils Melngailis, although yet not totally convinced about his brilliancy, I believe he deserves way better than what he is going through now... *hint*