Company sales plan approved

Jun 14, 2001
BNS

The agency's council decided to approve the sale of 2 percent or 798,000 Latvjas Gaze shares at the first auction to be held at the Riga Stock Exchange. Decisions about further auctions will be made later.

The Latvian state will retain ownership of two Latvijas Gaze shares to avoid violation of the agreement signed with shareholders in the gas company.

LPA Director General Janis Naglis said that a special open auction to sell 2 percent of Latvijas Gaze shares could be organized at the Riga Stock Exchange this July.

The LPA decided in favor of selling 8 percent of Latvijas Gaze shares in special auctions in the stock exchange to allow the state to get maximum proceeds in cash. Minimum proceeds from these sales are estimated at 15.40 million lats ($24.06 million).

This auctions also fully complies with the privatization regulations, share-sale and shareholder agreements.

The decision also has some deficiencies, however, such as possible objections from strategic investors and the failure to create the opportunity for people to use their privatization vouchers.

Naglis said shareholders may object to the decision because under other options for sale of the state-held shares current shareholders would be able to buy Latvijas Gaze shares at a lower price.

According to the shareholder register as of late July 2000, Russia's Gazprom holds 25 percent in Latvijas Gaze, Germany's Ruhrgas holds 25.6 percent, Germany's E.On Energie AG holds 17.1 percent, Itera Latvija holds 16.6 percent, the Latvian state holds 8 percent and Fortum Gas and Oil OY holds 1.8 percent.

Russian and German strategic investors in Latvijas Gaze have not yet decided whether they would join the auction of the company's state-owned shares, while Itera Latvija said it would likely take part in the first auction, according to company President Juris Savickis. He said the company, if it joins the auction, would like to buy all shares on offer. Savickis said Itera Latvija wanted to raise its stake in Latvijas Gaze to some 20 percent.

Gazprom has not yet made its decision public.

"We are expecting the offer and will then decide if we are joining the auction or not," a Gazprom representative said.

Strategic investors from Germany also have not yet decided publicly whether they would join the auction.

Ruhrgas representative in Latvia and Estonia, Joahim Hockertz, said that Ruhrgas would make a decision on participation in the auction after discussing it with E.ON Energie, another German shareholder.

Latvijas Gaze has a registered capital of 39.9 million lats.

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