Ventspils Nafta paid 21.89 million lats ($34.47 million), or 0.35 lats per share, for a 31.27 percent stake in an equity auction for LASCO, one of Europe's largest shipping firms.
The oil firm then bought an additional 18.67 percent on the open market, raising its total stake to 49.94 percent. Private investors bought the remainder of the 51 percent stake on auction.
Ventspils Nafta said in a statement submitted to the Riga Stock Exchange that its decision is linked with the increasing risks coming from heightened competition in the oil transit market and its plans to diversify the oil transit risks.
Industry sources say Ventspils Nafta wants to expand its operations into other fields to hedge its bets on oil transport.
Guntis Karklins, head of Latvia's Privatization Agency's communication unit, said he was glad to see the privatization of LASCO finally come to an end.
"We would have been happy to see more bidders. The process has taken too long. Foreign investors were not really interested any more, but everybody was able to bid," Karklins said.
But the sale has already snagged on a complaint from British Beacon Shipping Ltd., which said it was unfairly disqualified from bidding when its letter of credit was not delivered by the June 25 deadline.
Riga's Central Court has ordered the 51 percent stake frozen while an investigation into the complaint is condcuted.
The Beacon Shipping bid, if accepted, would have been $75 million, or 0.45 lats per share.
Meanwhile, some lawmakers have criticized the deal as only cosmetic privatization since the state still holds a 40 percent stake in Ventspils Nafta.
Ainars Slesers, a board member for Latvia's First Party, even called for Economy Minister Aigars Kalvitis' resignation, but Parliament refused to consider any no-confidence motions.
The selling of LASCO shares for cash was the final step in the privatization of the company. Some 32 percent of shares have already been sold to individuals for privatization vouchers.
During the public offer of shares for these vouchers, 26.79 percent were bought by Hansabanka and Latvijas Krajbanka on behalf of clients.
Guntars Kokorevics, president of Riga's Stock Exchange, said one additional foreign investor, who he refused to identify, was interested in buying some 14 percent of LASCO shares, but was turned down because it offered a price below market value.