Latvijas Gāze subsidiary to be sold to Estonia's Eesti Gaas

Take note – story published 1 year ago

The Latvijas Gāze natural gas utility has signed a definitive agreement to sell its subsidiary GASO to Estonian gas company Eesti Gaas, according to Latvijas Gāze's statement to Nasdaq Riga.

For the transaction to be completed, government approval is needed for the handover of national security assets and clearance from the competition authority.

Latvijas Gāze will receive a base equity consideration amounting to EUR 120 million and interest payable for the time until completion. The transaction is expected to close by the end of 2023, subject to customary closing conditions.

The sale is part of Latvijas Gaze's plan to focus on its core business - gas wholesale and retail trading.

Latvijas Gāze CEO Aigars Kalvitis said:

"We are pleased to announce the sale of JSC GASO and believe this is a positive step for both Latvijas Gāze and GASO. The sale allows us to concentrate our resources on our core business and create value for our shareholders." 

Ain Hanschmidt, Chairman of the Supervisory Board of Eesti Gaas, said that the Estonian company sees the future in natural gas and knows how to run and grow the business.

"Gas is and remains a significant energy source in Latvia and this encourages us to invest," Hanschmidt said.

Latvijas Gāze shareholders at a meeting on August 8, 2022 decided to start the reorganization of its distribution system operator Gaso by division, transferring 100 percent of Gaso shares, currently owned by Latvijas Gāze, to a new incorporated company.

In accordance with the current regulation, Gaso cannot be run by Russian or Belarusian shareholders, and since Latijas Gaze has shareholders from Russia, Gaso must be sold.

Gaso is a subsidiary of the Latvijas Gāze natural gas company and the only natural gas distribution system operator in Latvia. The company ensures the safety of gas networks, provides technical services and measures gas consumption. Gaso launched operations in December 2017.

Gaso's share capital consists of 39.9 million shares. Latvijas Gāze  is currently the sole owner of Gaso.

In 2021, Gaso turned over EUR 57.91 million and generated EUR 11.55 million in profit.

The largest shareholders of Latvijas Gāze include Russia's Gazprom (34 percent), Marguerite Gas II S.a.r.l. (28.97 percent) and Germany's Uniper Ruhrgas International GmbH (18.26 percent) and Itera Latvija (16 percent).

Eesti Gaas operates in Finland, Latvia, Lithuania and Poland under the Elenger brand name. Eesti Gaas offers customers natural gas in the form of pipeline gas, compressed natural gas (CNG) and liquefied natural gas (LNG) and operates Estonia’s largest gas network. 

Infortar, the owner of Eesti Gaas, operates in five countries, the company's main fields of activity are energy, shipping and real estate. The balance sheet volume of Infortar reaches EUR 1.1 billion. The Infortar Group has a total of 47 subsidiaries. Infortar owns a 41 percent stake in Tallink Grupp, a 100 percent stake in Eesti Gaas and a real estate portfolio.

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