Ventspils Nafta sale approved

  • 2003-05-29

An extraordinary meeting of the Latvian Privatization Agency's board on May 26 approved the sale of a 5 percent state-owned stake in the oil terminal Ventspils Nafta reserved for its current largest private shareholder, Latvijas Naftas Tranzits, setting the price at 0.87 lats (1.322 euros) a share, or 4.5 million lats.

The 5 percent stake was reserved for LNT under a prior privatization agreement, with LNT announcing its wish to buy the stake earlier this April, just moths before the deadline.

The price for the Ventspils Nafta stake was set according to the average market price of the oil terminal's stocks as determined by the official Riga Stock Exchange listing.

Payment for the stake will be due in three years' time and must be paid in lats.

The agency is set to sign the purchasing deal with LNT in the coming weeks. Just before exercising its option to buy the reserved stake, LNT sold off a 9.2 percent stake in the oil terminal with first rights to buy it back at a later date, a so-called repo transaction.

The deal was officially said to have been made for acquiring the funds needed to pay for the 5 percent reserved stake, but it will also successfully prevent LNT from having to announce a share buyout, as it would have gained control over more than 50 percent of the company once it purchased the 5 percent stake.

Before selling off the 9.2 percent stake in early April, LNT held 47 percent in Ventspils Nafta. The Latvian state holds 43.6 percent, of which 5 percent is reserved for LNT.