Karlberg bullish on outlook for Lattelekom, LMT

  • 2005-12-14
  • Staff and wire reports
RIGA - TeliaSonera's regional chief expressed optimism last week that the Scandinavian telecommunication company would purchase the state-owned stakes in Lattelekom and Latvijas Mobilais Telefons in six months to one year.

Kenneth Karlberg, TeliaSonera's CEO in Norway, Denmark and the Baltics, told journalists on Dec. 8 that now was the right time for the state to sell its stakes in the telecommunications companies, since TeliaSonera had the necessary financial resources to purchase the stakes, which are valued at hundreds of millions of euros.

Also, the value of telecom assets in the Nordic and Baltic countries are quite high, Karlberg added, so it is sellers' market.

He added that TeliaSonera had time restrictions and that it would not be able to keep financial resources on the side indefinately to acquire Latvia's premier telecommunications companies.

Karlberg noted that TeliaSonera still wants to gain control over both Lattelekom, the fixed-line operator, and LMT, the leading mobile operator, but that it might also agree to acquire just LMT.

TeliaSonera owns a 49 stake in both Lattelekom and LMT. Lattelekom, for its part, owns 23 percent in LMT. The state owns or controls a 51 percent interest in both companies.

Karlberg told reporters that TeliaSonera managers met with the government's work group to decide what to do with the state-held stakes in Lattelekom and LMT. He said TeliaSonera officials assessed the talks as positive, and both sides agreed to continue negotiations.

The date of the next meeting is not known yet.

The issue of selling the state-owned stakes in Lattelekom and LMT has been a thorny one for both sides for a number of reasons. At one point, TeliaSonera had filed a suit against the state, to which the latter responded by issuing a counter-suit. Both the previous and the present prime ministers have been cool to the idea of selling the two companies to the Scandinavian firm.

Lattelekom generated sales of 131.4 million lats (186.9 million euros) in 2004 and made a net profit of 33.5 million lats. LMT posted a preliminary profit of 54.6 million lats, up 29 percent year-on-year, on sales of 149.3 million lats. It is considered to be the most profitable company in Latvian history