The telecommunications company TET has said that it is prepared to acquire all shares in Latvijas Mobilais Telefons (LMT) so as to take over full ownership of the company. TET board chairman Uldis Tatarcuks talked to LETA about possible future scenarios for TET and LMT.
If the shareholder structure of TET remains unchanged, then 51% of the merged company would be owned by the Latvian state, whilst 49% would be held by the Telia company in Sweden, Tatarcuks said.
The issue of shareholders, however, is not in the remit of TET’s management team, the board chairman added. It is up to negotiations among shareholders themselves.
“We’re not invited to these discussions, and we think that that is logical,” said Tatarcuks. “It is a matter for both shareholders when discussing various developmental scenarios amongst themselves.”
The TET chairman also said that his company has the financing to buy out LMT’s shares.
“One parameter that is very important when assessing the situation of a company is cashflow,” Tatarcuks explained. “We have a positive cashflow with practically no loans except for one short-term construction loan. We are working at a profit.” The board chairman also said that it would be worthwhile to examine whether the situation is the same for both companies.
Tatarcuks insisted that TET is in a better position to borrow money from banks, but shareholders are also discussing the possibility of flotation on the stock market, which TET considers to be a useful possibility for future.
“Our position today is very good, and we’re able to raise funds from banks more cheaply and quickly than others,” said the board chairman. “We’re fully confident that we could raise the funds for this transaction.”
As has been reported in the past, Latvia’s government agreed on July 16 on a series of scenarios for negotiations with Telia, which is a shareholder in the Latvian tech companies TET and LMT.
The government outlined issues to be discussed with Telia and authorised the Ministry of Economics to pursue the talks. The ministry was expected by mid-October to report back to the government on the outcome of the talks and to propose the way forward.
LETA has learned from unofficial sources that options which are being discussed by Latvia and Telia involve a merger of TET and LMT, but also a decision to maintain the current status quo. The possibility of a full or partial buyout of the two companies by Telia and the divestment of certain assets is also being considered.
Latvia’s government owns 51% of TET via the Public Asset Management Possessor, while the remaining 49% rest with a Telia subsidiary, Tilts communications. When it comes to LMT, Tela and subsidiary Sonera Holding own 49% of the company, the Latvian state owns 28% via the Latvian State Radio and Television Centre and the Public Asset Management Possessor (23% and 5% respectively), and TET controls the remaining 23% of shares.
The management scheme for TET and LMT has been discussed in the past, but the two shareholders – the Latvian government and Telia from Sweden – have so far been able to agree on what changes are to be implemented.
Source: BNS
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