Latvia's Minister of Transport Ainars Slesers has proposed selling TeliaSonera's 49 % share in Lattelecom to a new investor, while TeliaSonera says it will insist on implementing functional separation at Lattelecom if this deal goes through.
Slesers proposal effectively kills any chance of The Blackstone Group participating in the privatizaion of Lattelecom.
According to Kenneth Karlberg, head of TeliaSonera's Mobility business and the Sisyphus who has been rolling the privatization rock up the Latvian government hill for several years, the investor is someone "closer to the government" but apparently an entity that TeliaSonera could do business with. Karlberg declined to name the investor, saying that he was awaiting a formal written proposal to be delivered early next week.
Sisyphus (who may actually be getting the rock to the mountaintop this time) indicated to this blogger that TeliaSonera would still prefer doing a LVL 500 million deal to acquire 100 % of both operators, but if this fails, plan B is to develop LMT as a full spectrum competitor to Lattelecom, including fixed line services. Karlberg said that buying network and copper last mile capacity from a future Lattelecom wholesaler was an option for LMT.
He stressed that any deal selling 49 % of Lattelecom to the new investor would have to include covenants committing the new owners -- call them Brand X and the government -- to implementing the functional seperation of Lattelecom into wholesale network and retail services companies as proposed in TeliaSonera's last letter to the government where it proposed buying both companies.