Latvijas Gazes shares hit public auction

  • 1998-07-30
  • Anastasia Styopina
RIGA – The public offering of shares from the Latvian gas utility Latvijas Gaze (LG) is expected to arouse interest among local and foreign investors.
From Aug. 3 to Sept. 25, investors will be able to acquire 5.4 million LG shares for privatization vouchers. The Latvian Privatization Agency (LPA) determined the price of one share for public offering at 2.5 lats ($4.10).
LG's shareholders also decided to increase the company's share capital from 36 million to 39.9 million lats through the closed issue of shares.
Two major LG foreign investors, the German consortium of Ruhrgas and Preussen Elektra, and the Russian Gazprom concern, will be offered shares at the price of 1.46 lats.
The two strategic investors currently hold 16.25 percent of shares each; the rest belongs to the state. After the closed issue of shares is completed, the German consortium and Gazprom will each hold 18.26 percent stock in the company.
LPA Director General Janis Naglis justified the difference in price for public and closed issues because he said the opinion of strategic investors was taken into account when the closed issue's price was calculated, the Baltic News Service (BNS) reported.
According to BNS, Naglis promised the price of the public issue will be reduced if there is no demand for LG's shares.
However, Ralfs Dreska, ICI Invest stock expert, said the public offering of the LG shares will cause great interest among investors.
"The announcement of the public offering has been long awaited," Dreska said. " It will be the only opportunity to acquire Latvijas Gazes shares. Besides, only 5.4 million shares are offered, so the interest should be very high."
The announcement of the public offering immediately influenced the price of privatization vouchers, and Dreska said the price might climb over the 3 lat level.
Dreska estimated that the LG shares will appear on the Riga Stock Exchange only next spring, and the price might be higher than 2.5 lats per share.
Ilze Nagla, Riga Stock Exchange public relations department director, said she can't estimate when LG shares will be quoted on the exchange.
When asked about possible demand for LG shares, Nagla said securities specialists expect investors' interest to rise when large enterprises appear on the stock exchange.
"LG can be a part of this theory," Nagla said.