Source: TeliaSonera eyeing Lattelekom

The telecommunication company TeliaSonera has offered to buy the Latvian government's 51 percent stake in the fixed-line telephone provider Lattelekom, a business newspaper reported last week.
The Swedish-Finnish company reportedly made a simultaneous settlement offer in the arbitration dispute with the Latvian government and secured for itself a majority stake in mobile operator Latvijas Mobilais Telefons, according to the paper.
An unofficial source close to the negotiation process told Dienas Bizness on condition of anonymity that TeliaSonera, in order to obtain 100 percent in Lattelekom and secure an indirect controlling stake in LMT, is ready to pay 2 billion kronor (222.22 million euros) -3 billion kronor.
The source said that TeliaSonera, as part of the arbitration settlement with the Latvian state over its decision to cut short Lattelekom's monopoly status in apparent violation of a previous agreement, was offering various possibilities for the purchase of Lattelekom shares - from buying a small share to acquire majority control to purchasing the state's majority stake outright.
A TeliaSonera spokeswoman refused to comment on the news.
TeliaSonera currently owns a 48 percent stake in Lattelekom and has sued the government over its decision to end the company's monopoly on fixed-line services on Jan. 1 of this year. The monopoly was originally intended to last until 2010.
TeliaSonera also owns 49 percent of LMT, one of two mobile telephone providers in Latvia.
Lattelekom also owns 23 percent of LMT.
Dienas Bizness noted that Latvian press reports had suggested earlier that TeliaSonera wanted to buy the state-owned shares in Lattelekom.
TeliaSonera stressed its earlier statements to the effect that it wanted to acquire majority control in all three Baltic states' telecommunication companies in which it already holds stakes.
The arbitration proceedings were launched in the summer of 2000 by Finland's then telecommunication company Sonera, which owned Tilts Communications - the nominal owner of 49 percent of Lattelekom.
Sonera recently merged with Telia, another Scandinavian telecommunication company.
Tilts is demanding the Latvian state compensate it for reducing Lattelekom's length of monopoly.
The Latvian state countered with a lawsuit arguing that Tilts failed to meet its obligations under Lattelekom's sale agreement.
In an effort to maintain its market share and boost profitability, Lattelekom managers have adopted a plan to reduce costs, including streamlining nonprofile business and laying off hundreds of employees.
Last week the company announced a tender on the right to provide debt recovery services, according to the Baltic News Service. The debt recovery service provider will recover debts from Lattelekom debtors, including upholding claims on recovery of debts or damages. In the past this function for Lattelekom was performed by the company's credit control and supervision service.
Lattelekom spokeswoman Ani-ta Leiskalne said that the tender was announced once the company decided to drop all functions not directly related to telecommunication services.