Shareholder change at Estonian railway imminent; state to be involved at every step

  • 2005-12-21
  • From wire reports
TALLINN - The announcement that a shareholder in the controlling owner of Estonian Railway was prepared to sell has created a storm of speculation, with government officials saying they would monitor any change of ownership from start to finish.
Ganiger Invest, owner of 33.3 percent of shares in Baltic Rail Services, which controls a holding of 66 percent in Eesti Raudtee (Estonian Railway), has proposed that Tallinna Sadam (Port of Tallinn) buy its stake.

Port of Tallinn executives said it was vital that the government be involved in any ownership change affecting Estonian Railway. Neinar Seli, chairman of the port's supervisory council, said it was a strategic decision for the state, and the port could not do it of its own accord.

Seli added that other owners of Baltic Rail Service could buy the stake first. Still, he said that, due to the articles of association and other agreements, control of one-third in Estonian Railway shares sufficed to protect the port's interests.

The Port of Tallinn is seriously considering Ganiger's offer, the port's board chairman Ain Kaljurand said. It is better for business if a longer stretch of the transit chain is being controlled, he added.

Seli said the port was currently holding talks with Ganiger, but the final decision would be made by the government on the basis of results produced by an Economic Affairs Ministry committee and other consultants hired by the state.

Meanwhile, the Competition Board said if the port decides to acquire a holding in Baltic Rail Services, it would look into the deal.

Aini Proos, the board's deputy general director, told the Baltic News Service that the deal would certainly raise question marks as it would affect the activity of companies operating on the same market.

Proos said mergers are investigated if the revenues of the parties in the year prior to the merger amounted to 500 million kroons (32 million euros) or if the country-wide turnover of at least two merging parties is higher than 100 million kroons.