Latvian telecoms giant could be floated on stock exchange

At a press conference, KPMG Baltics said it had advised the government to merge majority state-owned telecommunications companies Lattelecom and Latvijas Mobilais Tālrunis (LMT) into one company whose shares should be traded on the stock exchange.

The conclusions of the study "The State Strategy for Action with Lattelecom and LMT Capital Sections" conducted by KPMG include not only conclusions about the activities of LMT and Lattelecom, but also an insight into the telecommunication market throughout Europe.

For further action with LMT and Lattelecom, negotiations will be held with the government, as well as with their other shareholder, the Scandinavian telecommunications company TeliaSonera.

However, KPMG's current offer is to combine LMT and Lattelecom into one company and attract additional capital to it, creating a different ownership structure than it has been to date.

Specifically, it is proposed to reduce both the state and Telia Sonera's participation in the merged entity to around 35% each. The remaining 30% of the merged entity's shares could be quoted on the stock exchange, thus involving private shareholders and pension funds in the company's ownership.

It has already been reported that the issue of further actions with state-owned shares of LMT and Lattelecom has again come to the agenda of the government.

In their government-submitted report, KPMG experts have been estimating the value of the combined business at around one billion euros.

The government, on Tuesday, August 8, instructed the Privatization Agency to develop a concrete proposal for further action with state-owned shares of LMT and Lattelecom by October 5th.