Tuesday, November 06, 2007

Lattelecom MBO not on the agenda

The proposed management and staff buyout of Lattelecom is not on the agenda of the November 6 meeting of the Latvian Cabinet of Ministers and it looks like this matter will be delayed indefinitely. Despite two valuations made by Ernst & Young and the Swedish-based investment bank Carnegie, the acting Minister of Economics Gaidis Berzins says that no official valuation of Lattelecom and Latvian Mobile Telephone (LMT) has been made (according to lengthy official tender proceedings to find the valuator, etc. etc.).
Berzins' Fatherland & Freedom Party has expressed serious reservations bordering on outright opposition to the MBO, as has the party's Member of the European Parliament Inese Vaidere, writing several opinion pieces in the Latvian media.
The postponement of the decision on the MBO is,  I think, the beginning of the end for this attempt to privatize Lattelecom. The matter will be dragged long into 2008, debated in a fog of bizarre conspiracy theories and wacko economics, and finally muddled to death. 

1 comment:

Anonymous said...

Knowing a bit about the party that is blocking the privatization, I would not be a bit surprised if the reason behind it was that they haven't gotten their share out of it. It could just be that Melngailis is trying to do it too honorably with unhonorable people. I was once told by a person, who knows these people, not to waste my time trying to do something good for the country unless I am willing to pay big bucks up front.