On Tuesday, July 16, in the closed part of the meeting, the government came to an agreement on further scenarios for negotiations with the second shareholder of the telecommunications company "Tet" and the mobile communications company "Latvijas mobilais telefons" (LMT) – the Swedish enterprise "Telia Company" ("Telia") . The Ministry of Economy will report on the results of the negotiations in mid-October. At a closed meeting, the ministers considered various important issues for five hours, one of them was the further development of Tet and LMT. It is known that the Cabinet of Ministers has outlined several directions of action, but the state must discuss plans with the second shareholder of Telia. Minister of Economy Viktor Valainis (Union of Greens and Farmers) announced this in an interview with Latvian Radio and Latvian Television, writes the portal LSM.lv. “Today the government agreed on further scenarios for negotiations with the second shareholder and gave a mandate to the Ministry of Economy to conduct these negotiations. In mid-October it will be necessary to return to the government with the result of these negotiations and a vision. In any case, the government decided to take a rather tough position, securing the interests of the state in these enterprises, so that these enterprises become more competitive," Valainis said. According to him, it is in the interests of the state to attract investments and introduce innovations. The Minister of Economy also emphasized that both companies are strategic, and their role should not decrease. The Minister of Economy assured that at no point was there any discussion about reducing the role of the state in these enterprises. "As for the proposal that we sell something, no, such options are rejected and we are not considering such options at any level. Of course, the consultant's reports evaluate all possible scenarios, but they did not even reach the government's assessment, we initially excluded them as options at the expert level,” Valainis said. Regarding the scenario of buying back the company's shares from Telia, the politician did not rule out such a possibility: “This option is not excluded at the moment, and we are considering not only this, but also other options. But, of course, the main element is how we We can strengthen the interests of the state in these enterprises." The idea of finding another investor was also considered. “Such ideas were also discussed. (..) This is a very extensive study, it’s not in vain that we spent so much time on these discussions. But at the moment we have not gotten to that point,” Valainis said. At one time, a complex management scheme for Tet and LMT was created, the changes of which the two shareholders – the Latvian state and the Swedish company Telia – have still not been able to agree on. The state, represented by Possessor, owns 51% of Tet's shares, and Telia's subsidiary, Tilts Communications, owns 49%. Swedish Telia and its subsidiary Sonera Holding have a 49% stake in LMT. Another 28% of the capital is owned by the state: the holder of 23% of the shares is the Latvian State Radio and Television Center, another 5% – "Possessor". And 2% of LMT capital shares belong to the Tet company. This theoretically means that, through Tet, the state controls another 11.73% of LMT shares, and Telia 11.27%. That is, the share of Telia in the capital of LMT is 60.3%, and the share of the Latvian state is 39.7%. %. However, in practice this does not happen, and in fact the state has decisive control over the LMT as well, since it has a majority of "Tet". At the same time, it slowed down the adoption of a number of strategic decisions that require consensus. Now Telia has proposed to change this. The discussion has always been about whether the state is ready to lose a controlling stake in enterprises, expert Juris Kaža told LSM.lv. Telia's proposal envisaged the division of Tet and the sale of the telecommunications business LMT, in which the Latvian state and Telia would then own the same number of shares. Back in November 2017, the Cabinet of Ministers decided not to merge Tet and LMT. In July 2018, then Prime Minister Maris Kucinskis (then SZK, now the Joint List) and Telia President Johan Dennelind signed a memorandum of understanding on the further development of Tet and LMT. On 23 August 2018, Prime Minister Kucinskis issued an order that created a working group for ensuring representation of Latvian interests in the development and implementation of the joint corporate strategy of Tet and LMT, as well as its financing. A year and a half later, the coalition that formed the government at that time postponed the decision on the future of Tet and LMT.
