Privatization Agency chief and board member resign

Privatization Agency (PA) board chairman Ansis Spridzāns and PA board member Guntis Lausks have submitted their resignations to Economics Minister Vjaceslavs Dombrovskis, the PA confirmed to LSM Thursday. The surprise news comes just a day before finalizing the expected sale of the state-owned stock in controversial Citadele Bank to foreign investors' group Ripplewood Holdings.

The Economics Ministry is the primary shareholder of the PA, and is responsible for coordinating the work of the agency charged with supervising large-scale restructurings of state-owned enterprises.

While no official reason for the resignations have been given, LTV news department Panorama tweeted in no uncertain terms:

“PA chief A.Spridzans has decided to step down from his post over the sale of Citadele!”

The Economics Ministry is the primary shareholder of the PA, and is responsible for coordinating the work of the agency charged with supervising large-scale restructurings of state-owned enterprises.

While no official reason for the resignations have been given, LTV news department Panorama tweeted in no uncertain terms:

“PA chief A.Spridzans has decided to step down from his post over the sale of Citadele!”

The announcement came just two days after the Cabinet approved in closed session the sale agreement of the state-owned share of Citadele Bank to international investor group Ripplewood Holdings, which would include a provision to allow the investors to divest from the purchase within a two-year time-frame.

Further details of the deal included allowing Ripplewood to buy up just a 25% share, leaving a 50% chunk to be sold to a yet unnamed investor, while the European Bank for Reconstruction and Development (EBRD) would retain its current 25% capital share.

The EBRD has expressed full support for the Latvian government’s plan to remove itself from the rescued commercial bank’s ownership structure after rescuing the failing Parex Bank during the global financial crisis of 2008 by spinning off ‘good bank’ Citadele and ‘bad asset’ brokerage Reverta in 2010.

Since then almost half of the approximately €2bn in state investments and guarantees has been recovered from both Citadele and Reverta – about €770m. About €130m of the support remains unrecovered.

The PA and EBRD are respectively still 75% and 25% stakeholders in Citadele at the moment.

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