Thursday, February 07, 2008

Bedding down with da Latvian guvmint??!

I was in Stockholm at a seminar for a couple of days, listening to some well-reasoned arguments as to why TeliaSonera would be a great owner (100%) for both Lattelecom and LMT. I missed covering the meeting between TeliaSonera's Kenneth Karlberg (who gave the presentation in Stockholm and went to Riga the next day). But the Latvian media are reporting that:

Lattelecom CEO Nils Melngailis and The Blackstone Group are willing to buy 49 % of Lattelecom from the Swedes for a proportionate share of the LVL 290 million that the original MBO consortium (including four banks putting up LVL 200 million) were willing to pay for all of Lattelecom.
I am still trying to get details, but this looks a little wacko at first glance. The questions I have are:

1) Are the banks out of the picture and Blackstone is willing to up its stake to just over LVL 142 million? I would think the banks breathed a sigh of relief once the prime minister torpedoed the MBO and they could redraw their credit budgets for the year.

2) Is Blackstone crazy? Do they have any idea what presenting business plans, etc. to the largely (and understandably) ignorant-on-these-matters Latvian government means? Do they know what will happen if all state procurement procedures are applied to Lattelecom for any and all major investments? It seems they may have some management independence agreement in mind, but still...
Latvian governments have been twisting and turning around the issue of privatization of Lattelecom since 1998. There is no reason why they can't continue for another 10 years. A new spasm of what has been called (in Latvian) "the wandering of cattle" has started in Latvian politics, two parties, one in the government, one in opposition, are cracking apart, and at least two new political organizations/parties are being formed, one of them by the former minister (Aigars Stokenbergs) who told TeliaSonera in 2006 that they would never get to buy Lattelecom. My old friend and neighbor from when I lived in Stockholm, Atis Lejins of the Latvian Foreign Policy Institute says he will drag the splintered and damaged Latvian Social Democratic Workers' Party back from the political Phantom Zone (where evil superheros were banished in the Superman comic?). Do I hear the bellowing of the baboons and the w00-haahaahaahaa of the toucan down at the zoo (which is, I kid you not, where they picked the current president of Latvia, at a cafe in the Riga Zoo). There is going to be a political zoo in this country, so let the politicians control 51 % of Lattelecom??

3) Do management and staff get anything out of this? I suppose it would have to be approved by both shareholders. Even under 100 % TeliaSonera ownership, at least some of management might be able to participate in group level share options.

If this proposal succeeds, then at least TeliaSonera comes out with some folding money and the ability to work on their self-admitted plan B, to make the mobile operator LMT a strong competitor to all other service providers, expanding into mobile broadband, fixed wireless business and home services, even TV .


Paadla Paarma said...

Are you saying TeliaSOnera is making a competitor? Don't kill us, is this a joke or from those presentations? What teliaSonera does is builds a real strong corruption network. They switch off any imaginable [regulatory] control and the start fucking whole country. That's why they are so "succesfull" in exCCCP police states..


Juris Kaža said...

Its clear you dislike TeliaSonera, but I still think that for massive bribery, they would have been caught in Sweden (even if they did it abroad). You have to present facts, who have they bribed? Why no local arrests or scandals in LV, LT or EE, or even Russia, where such charges are often used to attack foreign investors that are competitors to local companies.

Bleveland said...

Yes, there you are again. If not the whole country then they at least fucked you. It seems all like a personal vendetta from you towards Telia-Sonera. After all this time you still haven't been able to provide any proof for your bribery allegations. Maybe you can give that up. Tell us instead what they did to you in person (or else, please stay the H out of here).

As stated before: It is not what you know, but what you can prove.

Bedding said...