Buying key companies will require state approval

Saeima passed amendments to the National Security Law in the final reading on March 23 to ensure government control over the sale of companies essential for Latvia's national security, reported LETA news agency.

Saeima is yet to review related amendments to the Commercial Law.

The amendments concern certain large electronic services providers, national electronic mass media, as well as some strategic energy companies involved in the production and distribution of electric and thermal power, and natural gas.

According to the amendments, persons who want to acquire a major or controlling stake in a strategically important company will have to ask the government's permission for the deal.

The legislation applies to enterprises licensed to transmit, store and distribute natural gas. The company licensed to distribute natural gas in Latvia is Latvijas Gaze. In accordance with the Energy Law, Latvijas Gaze has to create a legally separated gas distribution system operator by the end of this year.

In order to fulfill this requirement, the company’s shareholders will meet on March 31 to decide on establishing the distribution system operator as a new subsidiary of Latvijas Gaze via a reorganization.

Likewise, the new provision applies to the TV3, LNT, PBK, LTV1, LTV7, Re:TV, Sportacentrs.com TV and Riga TV24 televisions.

In the electronic communications sector, the amendments to the National Security Law apply to Lattelecom and the three largest mobile phone operators in Latvia, which at the moment are Latvijas Mobilais Telefons, Tele2 and Bite Latvija.

The restrictions also apply to producers of electric or thermal power whose actual capacity exceeds 50 megawatts and transmission operators that own at least 100 kilometers of heating networks.

The amendments are meant to prevent persons, whose activities are against the interests of Latvia, European Union or NATO, from acquiring shares in companies that are essential for Latvia's national security.

The amendments were fast-tracked meaning the Saeima approved them in two readings instead of the usual two.

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