The Latvian government is weighing options regarding the ownership of telecommunications companies Tet and LMT. According‌ to the LETA news agency, unofficial ‍estimates suggest a potential cost to the state⁢ of between €550 million and ‍€600‍ million to redeem shares in these​ companies.

Economy Minister Viktors ​Valainis has dismissed these figures as speculation, suggesting the involvement of third ⁤parties.

In certain specific cases,​ we‍ also see various signs of raiderism‌ in this process that come from the desire of third parties to get involved and gain ‍benefits or opportunities primarily​ entitled to the main partner, which is‌ the country, Valainis⁣ said.

The government is reportedly considering two⁣ scenarios for redeeming Telia’s shares and managing LMT and Tet after a potential merger.

One scenario involves the state using capital from companies like Latvenergo and Latvian State Forests, potentially ⁣supplemented ‌by state budget funds, to finance⁤ the redemption.

The ⁣second ‍scenario proposes establishing a special-purpose company to attract investment from‍ commercial banks, pension funds, and other investors to‍ redeem Telia’s shares in LMT ⁢and Tet. Under this scenario,​ the⁢ state would‍ retain a co-ownership role.

Government representatives⁤ have labeled these scenarios as premature speculation, declining to provide​ further details.

At the moment, there is speculation to make some decisions ⁤that may not, possibly, Telia. So we also have to‍ think about​ what we are⁤ saying in public…what⁢ signals ​we are broadcasting,

Prime Minister Evika Siliņa emphasized the sensitivity of⁣ the ongoing discussions, stating, We are in ‌a very active phase of the‍ conversation.

We are very active now to talk to the country⁤ to maintain its own and set up strategic interest in these companies. We have received a counter -to ⁤-Telia offer, we continue to ⁤talk.and​ I urge you to treat ⁢all the public information very sensitive, ⁤ Siliņa said.

Valainis acknowledged progress in government discussions, stating, With‌ each of the government ⁣meetings we ‍are‍ approaching a decision and we are left with very few unanswered questions where we have formulated the position of⁢ government very clear today, which ​we will turn to ⁢Telia.

We have a clearly ⁢set goal that ​we do not do it from the state budget. We have ‍already agreed,

Valainis added,These ‍are already details,but we do not discuss those details ⁢as we have conceptual decisions ahead of us to choose ​the best strategy.​ It is too early ‍to comment on something.⁣ what has been made ⁢in the‌ public space is ⁤the assumptions.

The Latvian‌ State Radio and Television Center (LVRTC)⁣ has expressed interest in⁣ participating in the transaction.

We have a certain⁣ amount we are ready to ⁣invest in what we have declared in the ⁢working group and to the cabinet.​ And⁣ it still remains valid. at certain scenarios, we are ready to invest in the industry, said Girts Ozols, Chairman of the Board of LVRTC.

The government is expected to revisit the issue in April, but there is no guarantee of a definitive resolution at ​that time.

Background

On July ⁤16, 2024, the government convened in a closed session to discuss potential scenarios in negotiations with‍ Telia, the second-largest shareholder in Tet and LMT. The Ministry of Economy was tasked with leading these negotiations.

Reports indicate that the Ministry ‌of Economics is preparing to present proposals to⁣ the government on resolving ownership issues⁣ in the state-owned companies.

The current ownership structure of Tet and‍ LMT is complex,with disagreements between the Latvian state and⁢ Telia.

The state,‍ through “Public Active Manager”⁣ Possessor Ltd, owns⁤ 51% of Tet, ​while Telia’s subsidiary, Tilts Communications, holds 49%.LMT is⁢ 49%‍ owned ⁢by Telia and its⁢ subsidiaries, 28% by the Latvian state through the Latvian⁤ state Radio and Television‍ Center (23%) and Possessor (5%), and 23% by Tet.

This arrangement theoretically ​gives Telia a 60.3% stake in Telia and a 39.7% stake ‌to the Latvian state. ⁤However, the country maintains decisive control due to its majority stake in Tet, which has, at times, hindered strategic decisions requiring ⁤consensus.

Telia ​initially proposed a scenario ⁤where LMT would acquire Tet’s ‍telecommunications business, which⁢ would⁢ then be separated⁢ into a distinct entity. Both existing Tet shareholders would receive special dividends, and ⁤Telia would sell its 49% stake in tet. Subsequently, an initial public offering (IPO) of 20% or more of LMT shares would be offered on the stock exchange, with both shareholders selling ⁤portions of their shares. ‌The deal ⁢would also involve changes​ to the companies’ senior management.

Key Questions‍ About the Future of tet and LMT

The Latvian government is currently ⁣navigating the complex landscape of telecommunications ownership, specifically concerning Tet and LMT. This article provides an ⁢overview ‍of ‌the key considerations, scenarios,⁤ and stakeholders involved in‌ this meaningful decision.

What is the Latvian Government Planning Regarding Tet and LMT?

The Latvian government is currently ‌considering its options regarding the ownership of telecommunications companies Tet ​and LMT.The primary ⁤goal ‍is to clarify the state’s strategic interest in these companies. Negotiations with Telia, the second-largest ⁣shareholder, are ongoing, and‍ the government is actively working ⁢to secure latvia’s position in the telecommunications sector.

what are the Estimated Costs for Redeeming Shares?

Unofficial estimates suggest that redeeming shares in Tet and LMT could cost the state between €550 million and €600 million. However, Economy⁢ Minister Viktors Valainis has dismissed these figures as speculation, implying that these numbers might⁣ be influenced by external parties seeking⁤ to⁣ benefit from the process.

What Scenarios are Being Considered ‍for Acquiring Telia’s Shares?

The⁣ government is examining two main scenarios for acquiring Telia’s shares and managing Tet and LMT post-merger:

• Scenario 1: Utilize capital from state-owned companies like Latvenergo and Latvian State Forests, potentially supplemented by state budget funds.
• Scenario 2: Establish⁢ a special-purpose company to attract investment from commercial banks, pension funds, and othre investors. Under this model, the state ⁤would retain a co-ownership role.

Will ‍the Government Use⁢ State Budget ⁣Funds?

As ‍stated by Prime Minister Evika Siliņa and Economy ​Minister Viktors Valainis, the government has a clearly set goal not⁣ to use state budget funds for the ​purchase of shares.

What ‍is the Current ⁤Ownership Structure of Tet and LMT?

The current ownership structure ⁢of ⁣tet and LMT is complex. Here’s a breakdown:

• Tet: 51% owned by the Latvian state (through “Public Active Manager” Possessor Ltd), 49% by Telia’s subsidiary, Tilts⁣ Communications.
• LMT: 49% owned by telia and its subsidiaries, ​28% by the Latvian state ⁣(through the Latvian State Radio and ​television Center and Possessor), and 23% by Tet.

What Role Does Telia play ⁢in These Negotiations?

Telia, the second-largest shareholder in Tet and LMT, is in active negotiations ⁤with ​the Latvian government. While the exact terms and conditions are under discussion, Telia’s potential exit from the Latvian market is a central point of the discussions.

What is the Timeline for a Decision?

The government​ is expected to ⁣revisit the issue in April. Though, ‍there is no guarantee ‍of a definite resolution at that ‍time as the process is ongoing and subject to further discussion and ‌consideration.

Key Stakeholders and Their positions

Who is Involved?

Several stakeholders are involved ‍in the ​discussions:

• The Latvian Government: Leading negotiations ​and setting strategic goals
• Telia (Sweden): The second-largest shareholder in Tet and LMT
• The Ministry of Economy: ‌Tasked with leading negotiations.
• Latvian State Radio‍ and Television Center (LVRTC): Expressed ⁣interest in investing

Girts Ozols,​ chairman⁣ of the Board of LVRTC,‌ has stated that LVRTC is ready to invest in certain scenarios.

Potential Implications and Future⁢ Outlook

The decisions⁤ made ⁢regarding the ownership ⁤of Tet and LMT will significantly impact​ Latvia’s telecommunications landscape.The‌ government aims⁣ to secure the country’s strategic interests in⁣ these vital companies, ensuring a stable ⁢and competitive telecom sector.

Summary table

The following table summarizes​ the key data‌ related to the Latvian government’s ‌considerations regarding Tet and LMT: