RIGA - The government gave its approval to a plan by the Privatization Agency on Nov. 1 to sell the state's 38.6 percent stake in Ventspils Nafta via an auction at the Riga Stock Exchange.
Shares in the oil terminal will be sold in lots of five, seven and 25 percent, according to the Cabinet-approved plan.
Bidders will be informed that all the state-owned shares are being sold within a set period of time, which could either be over one or several days, officials from the Privatization Agency explained.
The government recently decided to divest its stake in Ventspils Nafta single-handedly, after the latter rejected a proposal to compile a joint-offer together with majority owners 's a group of investors from Ventspils. Relations between the state and Ventspils Nafta's private owners have been uneasy over the years. The government is particularly eager to sell its stake since it has yet to receive any dividend income from the asset and is unlikely to for some time given that Russia ceased delivering oil to the port via pipeline in the beginning of 2003.
The government hopes to earn 70 million lats (99.6 million euros) from the sale of its stake.
To pull off the sale, the Cabinet also approved the idea of inviting a financial consultant who will help prepare the auction. "To conclude such a deal, specific expertise is needed, as well as access to a broad circle of investors who will be ready to invest their money in the Latvian company," the agency said.
Prime Minister Aigars Kalvitis said the Economy Ministry expects the privatization to be completed in the first half of 2006.
LNT, which currently controls the oil terminal, has announced that it would not buy the state's stake.
LNT holds about 49 percent of Ventspils Nafta.