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U.S. investor seeks VN stake

  • 2003-12-18
  • Staff and wire reports
RIGA - A U.S. investment company has reportedly offered to buy the government's remaining stake in the Ventspils Nafta oil terminal for approximately 35 million lats (53.8 million euros).

The investment firm, BroadStreet Group, has supposedly offered Latvia 0.87 lat (1.3 euros) per share in Ventspils Nafta - significantly lower than its Dec. 15 market price of 1.95 euros - for the entire state-owned stake of 38.6 percent.
BroadStreet Group was reportedly prepared to buy the stake immediately and even obliged to establish a company that would manage the oil terminal.
Prime Minister Einars Repse has already ordered finance, transport and economy ministers to look into the offer, his spokeswoman said.
The U.S. company based its offer on two conditions: resuming the flow of Russian oil via pipeline and termination of the shareholder agreement between the state and Latvijas Nafta Transits, the controlling stakeholder in the terminal.
The much-maligned agreement was terminated earlier this year on the government's insistence, and LNT managers also established a separate subsidiary, Ventspils Nafta Terminals, that would concentrate wholly on the oil transit business and would eventually attract the interest of a foreign investor.
Ventspils Nafta spokeswoman Gundega Varpa told the Baltic News Service that the company did not have any information about BroadStreet Group or its offer to the state.
"All what we know is from the newspapers," she said.
However, it was unclear how the state could satisfy the condition on the resumption of oil supplies since Russia's pipeline operator Transneft has halted deliveries to the Latvian port and repeatedly stated that it had no plans to renew them this or next year.
No stranger to Russia, BroadStreet Group could be willing to help Latvia convince the Russians to restart deliveries.
BroadStreet Group was a major creditor to Promstroibank, a Russian financial institution controlled mainly by Gazprom and Unified Energy Systems, both state-owned energy giants.
The appearance of a strategic U.S. investor could be a welcome development for the port, which is expected to end the year with a major loss to the de facto embargo on the part of Russia, as many believe a third party is needed to bring the Russians and Latvians back to the negotiating table.