EU – Baltic States, Latvia, Legislation, Markets and Companies, Mergers and take-overs, Telecomunications

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 10:00

LMT and Lattelecom to continue as 2 separate entities

BC, Riga, 20.04.2016.Print version
Telecommunications companies Latvijas Mobilais Telefons (LMT) and Lattelecom will continue operations as two separate entities, the government of Latvia decided on April 19th, informs LETA.

The government tasked Latvian Privatization Agency with evaluating the situation and offering the government several scenarios to choose from. For this, the Privatization Agency has to hire a consultant by October 1, and present its report to the government by the end of the year.

 

"It will be an all-embracing study of the industry, taking into account the ongoing changes on the market," commented Economics Minister Arvils Aseradens (Unity).

 

He also said that the Economics Ministry would prepare a reply and send it to TeliaSonera, so the Scandinavian group could inform the government about its further intentions.

 

Prime Minister Maris Kucinskis (Greens/Farmers) said that government ministers today had unanimously voted against TeliaSonera's proposal, made last year, that the state should sell its shares in both companies and that LMT and Lattelecom should be merged.

 

When asked whether the government would purchase TeliaSonera's shares in LMT and Lattelecom if the Scandinavian company decided to sell them, Kucinskis said this was possible. "The main thing is that strategic communications infrastructure does not become property of an entity hostile to Latvia, where Latvia would not be able to do anything," said the premier.

 

Aseradens agreed that the government would consider buying the shares if this was dictated by security considerations.

 

As reported, Aseradens previously said that the two companies should not be merged, while Finance Minister Dana Reizniece-Ozola (Greens/Farmers) said she supported the merger.

 

LETA also reported, TeliaSonera proposed on November 20 last year that Lattelecom and LMT should be merged, and said it was expecting the government to take a decision by January 22 this year. The government of Laimdota Straujuma (Unity) opted to leave the decision to Kucinskis' government.

 

The economics minister had a meeting with TeliaSonera representatives, who informed him about the company's business strategy for the Baltic region and possible further development scenarios. TeliaSonera confirmed that it was planning to continue operations in the Baltic telecommunications sector, and considered investments in the Baltic telecommunications companies as long-term investments.

 

TeliaSonera representatives said they believed merging Lattelecom and LMT would be the best option for both companies and it would make use of the two companies' resources more effective. A merger would also optimize investments necessary for maintaining Lattelecom and LMT's competitiveness and improving the quality of their services.

 

As reported, Lattelecom posted EUR 32 million in profit, while Lattelecom Group's turnover amounted to EUR 191 million last year.

 

Lattelecom shareholders include Privatization Agency (51%), and TeliaSonera's Danish subsidiary Tilts Communications (49%).

 

On the other hand, LMT earned a profit of EUR 22.1 million and turned over EUR 179.2 million in 2015.

 

TeliaSonera has 49% stake in LMT, Lattelecom – 23%, Latvian State Radio and Television Center – 23%, Privatization Agency – 5%.

 

 






Search site