Two bidders present their prices

RIGA - The Latvian government approved the minimum sales price for the controlling stake in the state-owned Latvian Shipping Company at 1 a.m. on April 11 after a 14-hour government meeting, the longest chaired by current Latvian Prime Minister Andris Berzins.

The government also approved the list of bidders allowed to take part in the auction of the controlling stake in the Latvian Shipping Company. Both companies that submitted their initial bids are included in the list.

Two of three potential bidders for privatization of the Latvian Shipping Company have submitted their initial price bids to buy 68 percent of its shares. The initial bids were opened on April 4 by government and privatization agency officials in the presence of observers from Transparency International and the press.

The entire process could also be observed live via the Internet. However, the offered price and names of the bidders remained confidential to exclude the possibility of bidders making some arrangement between themselves before the auction, officials said. This possibility was turned down by Latvian Privatization Agency Director Janis Naglis, who said that "the bidders are too far away from each other to be able to agree and anticipate of each other."

According to unofficial information, the Latvian government has set the minimum sales price for selling the block of shares in the Latvian Shipping Company at 65 million ($103.50 million) or 70 million lats, the Baltic News Service reported.

Since the price has been classified as confidential, the officials did not provide official comments.

Minister of Economy Aigars Kalvitis said the government, while setting the controlling stake's minimum sales price, took into account arguments provided by all parties involved.

"The government did not set an unrealistic price," he said.

If the company's privatization process proceeds as planned the auction of a block of 68 percent or 136 million shares in the Latvian Shipping Company could take place May 11.

The company's share capital is 200 million lats divided in as many shares at a face value of 1 lat. The shipping company's idle funds are estimated at some $43 million.

The first LASCO privatization regulations in 1997 envisaged to sell to investors 32 percent of the company's shares for 80 million lats while in 1999 the price was raised to 94 million lats, but all bidders declined to participate in the privatization.

The second privatization regulations, developed in 1999, envisaged selling a 44 percent stake to investors for 44.88 million lats and retaining one golden share to the state that would secure the right to block important decisions. These regulations also did not raise any interest among investors and no one applied. The price later was reduced to 38.72 million lats, but again no bidders applied.