State likely to review MTG sales deal

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Even though the Latvian parliament has not yet adopted a law that would allow the state to block sales of strategic infrastructure companies, the government is likely to review the sale of the Modern Times Group (MTG) assets in the Baltics, Vilnis Ķirsis, State Secretary for the Economics Ministry told LSM on Friday.

He said that it's not clear at the moment whether MTG's deal to sell broadcasting businesses in Estonia, Latvia and Lithuania has been concluded. In case the deal concludes after the amendments are adopted, it will require permission from the government.

While if the deal becomes final by the time the amendments are adopted (slated for March 23), the state is likely to review whether the new owners of MTG's Baltic media are acceptable as concerns Latvia's national security interests, said Ķirsis.

"In an extreme scenario, the government might ask selling the [purchased] capital shares," said Ķirsis.

As reported, MTG has sold its broadcasting businesses in Estonia, Latvia and Lithuania to Providence Equity Partners, a US asset management firm in a deal worth €115m.

While on March 16 the Latvian parliament supported, in the first reading, law amendments that would empower the cabinet to stop the sale of strategic infrastructure companies.

The Saeima also fast-tracked the amendments, meaning they can be adopted in two readings instead of the usual three. The second and final reading is to take place on March 23. 

The amendments would allow the state to block the sale of strategic infrastructure companies, including energy companies and broadcast media.

These companies will have to have government permission to change ownership. Likewise they will have to give the state information about shareholders, members and indirect owners.

The state will be able to ask shareholders sell their shares, as well as strip them of voting rights within the company.

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