Former PM aims to go digital

  • 2003-08-31
  • Baltic News Service
RIGA - Former Latvian Prime Minister Andris Skele has made an offer to the Latvian Transport Ministry to buy the state-owned digital television development company Digitalais Latvijas Radio un Televizijas Centrs for $70 million - $90 million.
Skele, founder and former leader of Latvia's influential People's Party but who left active politics earlier this year, has made the offer to buy out 100 percent of DLRTC with all its assets, liabilities and debts, including a 23 percent stake in the country's leading mobile-telecommunication company, Latvijas Mobilais Telefons.
Skele's consultant Jurgis Liepnieks said that the offer was made during a meeting between Skele and Transport Minister Roberts Zile.
Liepnieks said that Skele's main interest in such a deal would be the digital television implementation project in Latvia, while the LMT shares could serve only as collateral for carrying out the project.
Many observers, however, criticized the proposal, saying the stake in LMT alone was worth for more than the money Skele was offering.
Skele tried to convince the Latvian transport minister how the state would benefit from selling the stakes in DLRTC.
"Seeing that the Latvian government sees no way of financing the implementation of digital TV in Latvia and contracts have already been signed, which are being challenged in legitimacy, and opinions are again being voiced about possible losses, I am offering to make a decision on the sale of DLRTC," he said.
Skele added that the digital television project in Latvia was a very expensive and complicated investment project and that carrying out such projects "under the wing of the state" prolongs them and makes them unpopular.
The former PM, who was an extraordinarily successful businessman before turning to politics, also said that by selling the digital TV company the state would be relieved of finding the funding for this project and would gain a significant amount of money.
According to Skele, the state would then not have to deal with solving business disputes and the possible risks of legal procedures if it decided to postpone or drop implementation of the project.
"The state would also avoid being sucked in to the pressure of various other TV infrastructure service providers and the struggle between influential lobbies," Skele said.
Selling the stakes in DLRTC would also mean that the digital TV project in Latvia would succeed, promoting the reputation of Latvia as a country of modern technologies and modern lifestyle, with digital TV accessible to anyone wanting it, he said.
Asked about funding, Liepnieks said that Skele had decided to focus on investment operations, but he would not comment on the financial details of such a deal.
"In any case, Mr. Skele's capabilities will allow for such a deal to be made without problems," he added.
Liepnieks said that Skele first wanted to hear an answer in principle as to whether the government was interested in any such deal. If the government expresses interest, the next step will be a detailed audit of DLRTC, as Skele has only information that has turned up in the press.
"He hasn't got copies of the infamous contracts, thus after the audit the price may even change considerably."
A Transport Ministry spokesperson said that Transport Minister Zile had received the offer and had handed the proposal to the ministry's state secretary, Aleksandrs Konosevics.
An answer is expected from Konosevics on the offer made by Skele by Aug. 1.
Upon fully launching his political career, the former Latvian PM sold off his stakes in the Ave Lat Group, which controlled many food and liquor producing companies, for $29 million.
A declaration received from Skele earlier this year on assets and income stated that he still possesses over $28 million.