Sale of shipping company: Take two

RIGA (BNS) - The Latvian Privatization Agency has developed new draft conditions for privatization of the Latvian Shipping Company and handed them to the Economics Ministry July 8.

The LPA had to prepare new terms after the two bids for the privatization of the shipping company were found to be invalid in mid-June because the applicants had not submitted all the necessary documents.

Under the new conditions, 41 percent or 82 million shares of the total 200 million company's shares would be offered to a strategic investor and 15 percent or 30 million shares would be offered publicly for privatization vouchers.

The undivided share package is to be sold at an auction with an initial price not lower than the market price determined by one of the 'big five' international auditing companies.

"The new privatization conditions have been developed taking into account the outcome of the implementation of previous privatization terms as well as keeping in mind the goal to get the maximum revenue from privatization of the company in 1999," the LPA stressed in a statement.

Only two international concerns bid for privatization of the shipping company in June, and the LPA blamed that on a high share price that was determined at 2 lats ($3.33) per share, double its face value.

The new privatization plan foresees 4 percent of shares should be sold to the company's employees and pensioners, 10 percent will go to the special state pension fund, and 0.9 percent will be kept for the privatization reserve.

The LPA board has yet to decide what to do with 19.1 percent of the shipping company's shares which are expected to be sold for cash.

Under the new draft conditions, the Latvian Shipping Company should be registered and based in Latvia. The LPA stated that the company should be able to compete on the international shipping market after the privatization.

Economics Minister Ingrida Udre told reporters July 9 that the new privatization terms should be approved by the Cabinet as soon as possible.

She noted that if the formation of the new government drags on, the privatization terms should be approved by the Cabinet lead by former Prime Minister Vilis Kristopans.