RIGA - The largest private shareholder in Ventspils Nafta has rejected the state's proposal to combine interests in an effort to find a strategic investor.
Latvijas Naftas Tranzits said it was not interested in forming a combined block of shares in Ventspils Nafta. In a letter to the Latvian prime minister and the economy minister, Chairman Mamerts Vaivads said LNT was not ready to negotiate a combined block of shares since the state had failed to perform its previous obligations during the privatization of Ventspils Nafta. LNT, by contrast, had complied with all requirements. What's more, LNT had invested sizeable capital in order to acquire Ventspils Nafta stock and to develop the company.
"It is difficult for us to ascertain the state's interest in the further privatization of [Ventspils Nafta] and, accordingly, the facilitation of successful business development," Mamerts said in the letter.
The letter underscores the acrimonious relations that have existed between various governments in the capital and management of the oil company.
Mamers wrote that LNT had invested nearly 87 million lats (123.8 million euros) in acquiring Ventspils Nafta shares, which was several times more than the real price of the stock. "It is obvious and does not require proof," he said.
By contrast, "the money that the state made in the privatization process by selling a 42 percent stake in [Ventspils Nafta] to LNT has clearly been the most profitable of the privatization projects," said the LNT board chairman.
Economy Minister Krisjanis Karins said last week that he had met with a LNT representative over possibly forming a combined block of shares that would comprise a controlling stake (approximately 85 percent) that would be easier to sell.
Karins' spokeswoman told the Baltic News Service that Mamerts had voiced a different opinion when meeting with the minister previously.
On March 1 the government authorized the Economy Ministry to open talks with Ventspils Nafta shareholders on forming a combined stake to sell at an open auction. The right-wing government said it was selling its 38.62 percent holding since it had no business being a shareholder in the oil transit business.
After the government decision, Prime Minister Aigars Kalvitis said that a combined block of shares representing a controlling stake in VN would make the state-held shares more attractive to potential buyers.
Ventspils Nafta has run into serious financial difficulties since Russia ceased exporting oil through the pipeline leading to the Ventspils port in the beginning of 2003. Both government and company officials seem to have realized that the situation will not reach a breakthrough until a strategic investor is found, though it remains to be seen if the two sides will ever be able to cooperate.
