The Supervisory Council of Lattelecom has decided on December 6 not to recommend the extension of Nils Melngailis mandate as a member (and chairman) of the Lattelecom Managing Board while recommending to shareholders the re-election of two other board members whose terms expire in a few days.
The stakeholders (Latvian government 51 % and TeliaSonera 49%) are holding an electronic meeting on December 7 to vote on these recommendations.
The council's actions amount to a defacto dismissal of Melngailis, but no replacement candidate has been recommended. Supervisory Council chairman Gundars Strautmanis predicts that despite the Council's recommendations, Melngailis will be re-elected and also continue to work as managing director (CEO) of the company, a position theoretically unaffected by his loss of a board seat.
Meanwhile, lame-duck prime minister (his government resigned on December 5) Aigars Kalvitis says this is the best time to privatize Lattelecom (!?), a surprising reversal of the government's defacto rejection by delay of the MBO offered by Melngailis with a consortium including several banks and The Blackstone Group to finance the deal. The fact that the government has apparently voted against recommending re-election of Melngailis also amounts to a rejection of the MBO, even though some officials say this is not so.
My interpretation -- make things such a murky mess that the MBO consortium, especially Blackstone, will go away all by themselves. Then, perhaps, the carcass can be divided among local vultures...:)
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