Latvia, Technology, Telecomunications

Following today's meeting, Prime Minister Ivars Godmanis said that two "legally-precise" proposals will be presented to the ministers next Tuesday, and they will have to select one.

The ruling coalition parties had reached agreement this morning in principle on the privatization framework proposed by the Transport Ministry where Latvijas Valsts radio un televizijas centrs (Latvian State Radio and Television Center, LVRTC) would have a different role in the Lattelecom privatization deal, and the U.S. investment company Blackstone would also have an opportunity to participate in the privatization.

The agreement stipulates that LVRTC buys TeliaSonera's 49 percent interest in Lattelecom and immediately sells it to an investor, most likely, to Blackstone.

LVRTC would act as a go-between in the deal, the deal would also meet TeliaSonera's requirement that it would only sell the shares to the state of Latvia. The Lattelecom privatization deal also envisages that LVRTC would sell the state-owned Latvijas Mobilais telefons (LMT) shares to TeliaSonera, and that TeliaSonera would also acquire LMT shares held by Lattelecom.

The other privatization option is from the Economy Ministry which calls for a 100% of Lattelecom's shares to be sold at auction, both to the state and to TeliaSonera.

Godmanis admitted that there is discord on this matter, still most of the ruling coalition parties are for the Transport Ministry's plan. TeliaSonera is also opposed to the Economy Ministry's option, he added.