RIGA - The Latvian government was to review a report on the management of Lattelecom and Latvijas Mobilais telefons (LMT) shares on Tuesday, Jan. 7, reports Nozare.lv.
According to Economy Minister Daniels Pavluts’ press secretary Dauga Grube, the value of both LMT and Lattelecom shares has decreased. In 2012, the value of LMT was estimated at 253.2 million lats (360.3 million euros), and the value of Lattelecom at 230.5 million lats. These two figures have decreased to 199.4 million lats and 216.6 million lats, respectively, in 2013, according to expert opinions.
A task force was set up by the Cabinet of Ministers, made up of the finance, transport and economy ministers, to discuss further management of state-owned LMT and Lattelecom shares and inform the Cabinet about its findings.
The report, to be submitted to the government and based on a joint report by the councils of the two companies, will look at various models aimed at achieving closer synergy between LMT and Lattelecom to better harmonize the companies’ development strategies and ensure an increase in the value of the companies and their successful development, with the state remaining a majority shareholder.
The task force has concluded, though, that privatization of the state-owned stakes in LMT and Lattelecom would not be in the interest of the nation currently, but management practices need to be improved at both companies in order for the companies’ valuations to increase.
Lattelecom’s board and council proposed at the end of last summer that the company could merge with LMT in order to prevent the two companies’ values from decreasing and achieve closer synergy between the companies’ services and management structures.
Lattelecom was established in 1992; the company was originally named Lattelekom. In 1994, a Danish company, which at that time belonged to Finland’s Sonera, Britain’s Cable & Wireless and the state of Latvia, acquired a 49 percent stake in Lattelecom. In 1998, Sonera bought Cable & Wireless, and in 2002 it merged with Swedish company Telia, creating TeliaSonera - currently the owner of 49 percent of Lattelecom shares.
LMT was established in 1992 as the first mobile phone operator in Latvia. TeliaSonera owns 49 percent of the company’s shares, Lattelecom - 23 percent, Latvian State Radio and Television Center - 23 percent, and the state of Latvia - 5 percent.