Shareholders vote in favor of gas utility split

Latvijas Gāze shareholders on Friday voted in favor of the company's reorganization by unbundling its gas transmission and storage business to a new company called Conexus Baltic Grid.

Shareholders owning about 97% of the company's shares appeared in the meeting, with holders of only 0.01% of the shares voting against reorganizing the company.

Conexus Baltic Grid will manage the transmission and storage business, including the Inčukalns underground storage facility. Latvijas Gāze will retain its gas distribution and sales business.

The reorganization aims to ensure access to infrastructure after Latvijas Gāze's monopoly in Latvia's gas market runs out, spelling out the liberalization of the country's gas market.

Those who voted in favor of the reorganization Friday or applied previously will be granted shares in the new company.

Shareholders that harvest or sell natural gas will have to sell their shares in Conexus Baltic Grid by the end of 2017.

Under the law, Latvijas Gāze must be split in two companies - one for operating the gas transmission and storage system and the other for dealing with natural gas distribution and sale - by April 3, 2017. The former must be separated from Latvijas Gāze by December 31, 2017.

Latvijas Gāze earned €33.3m in profit in 2015, more than in 2014 when the company's profit amounted to €30.07m.

Russia's Gazprom owns 34% of Latvijas Gāze shares, Marguerite Fund has 28.97%, Uniper Ruhrgas International GmbH 18.26%, Itera Latvija 16%, and minority shareholders own 2.8%.

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Economy
Economy