Latvian Prime Minister Andris Kulbergs (United List) says he is still not convinced that the planned buyout of shares in Latvijas mobilais telefons (LMT) and Tet is sufficiently transparent or that the state will avoid excessive involvement in private business, according to comments made in an interview with TV3’s 900 Seconds.
Last week, Kulbergs publicly questioned on X whether the proposed transaction was “the deal of the century or the scam of the century.” He stressed that the Ministry of Economics and its advisers must demonstrate that the proposed transaction structure is sound, that Latvia’s national interests are protected, and that all risks have been properly assessed. However, following a closed-door government meeting on the issue at the end of last week, the Prime Minister said he had still not received the necessary assurances.
“I cannot disclose the details, but the conclusion is clear: the deal is not ready to be implemented,” Kulbergs wrote on X after the meeting.
Speaking to TV3 on Wednesday morning, Kulbergs declined to answer whether he now believes the transaction resembles more a legitimate deal or a scam. Instead, he reiterated that he had instructed the Ministry of Economics and its advisers to prepare what he described as an “elementary, easy-to-understand explanation” of both the transaction and its structure.
“We want a strategic investor who can unite these companies and fully unlock their potential.
At the moment, I do not see that. The structure is overly complicated. I do not understand why it has to be so complex when the end result could have been achieved much more simply. I also do not want the Latvian state to once again become deeply involved in the economy and private business. The state should not once again become the owner of a company that it may struggle to manage effectively,” the Prime Minister said, suggesting that Latvia has already seen similar unsuccessful examples.
Summing up his position, Kulbergs said he expects the Ministry of Economics to present a clear and understandable transaction plan so that the new Cabinet can formally approve it and move forward.
As previously reported, Economy Minister Viktors Valainis (Union of Greens and Farmers) said last week that detailed negotiations are currently under way with 23 potential investors interested in participating in the acquisition of Telia’s shares in LMT and Tet.
Following Friday’s extraordinary Cabinet meeting, where ministers reviewed a progress report on the transaction,
Valainis said the identities of the investors could not yet be disclosed.
However, he noted that the unusually broad level of investor interest would allow the government to select the partner whose proposal and long-term vision best serve Latvia’s national interests.
Commenting on the potential value of the transaction, Valainis said that a comprehensive valuation of both companies is still under way. The ongoing due diligence process will determine the final price, after which the government expects to receive the first binding offers from investors. According to the minister, internationally recognised investors with extensive business experience have expressed interest. The next stage will involve binding proposals specifying the conditions under which investors would be prepared to cooperate with the Latvian state. Valainis acknowledged that the transaction involves substantial financial sums.
He also noted that Latvia’s security services must carry out thorough background checks on prospective investors. The fact that investors are internationally known does not automatically mean they will receive unrestricted access to sensitive information, as the necessary security assessments require time.
Regarding the progress of the transaction, Valainis said the process is broadly proceeding according to schedule.
The government has also been presented with a comprehensive overview of developments dating back to 1998 in order to provide ministers with a full understanding of the background. According to Valainis, there is broad political agreement that the current ownership situation cannot continue because it risks reducing the value of both companies, making structural changes necessary.
He added that the government has heard presentations from international advisers, company representatives and other stakeholders explaining both the rationale for the proposed ownership changes and the negotiations that have taken place over the past year and a half with the current shareholders.
Valainis stressed that the government’s primary objective is to ensure that LMT and Tet become key drivers of Latvia’s technological development, boost exports and contribute more significantly to economic growth in areas where development has previously been constrained by disagreements among shareholders.
He also noted that
governance at both companies has already been substantially improved
and that their business plans have been updated to meet international standards.
As previously reported by LETA, an international consortium led by J.P. Morgan has been selected as the financial and legal adviser for the acquisition of Telia’s shares in LMT and Tet. The consortium also includes A&O Shearman, Walless, Deloitte, Tegos and Hardiman Telecommunications.
The advisory contracts were signed at the end of January. Latvenergo has previously stated that the advisers’ remuneration depends on the successful completion of the transaction, meaning the advisers have a direct financial interest in achieving a favourable outcome. The detailed contract terms remain confidential.
The advisers are responsible for structuring the acquisition, selecting investors, organising the transaction and preparing a long-term development strategy for both companies. They are also carrying out comprehensive due diligence on LMT and Tet.
The advisory team was selected from 16 international bidders following a three-month procurement process,
with all candidates undergoing the security screening required by Latvian law.
Telia has signed a memorandum of understanding with the Latvian government, Latvenergo and the Latvian State Radio and Television Centre (LVRTC) covering the sale of all of its holdings in Tet and LMT.
The Ministry of Economics has previously stated that the parties remain committed to the agreed timetable, which предусматриes signing the share purchase agreement during July and completing the transaction, together with the selection of a strategic investor, in the second half of 2026.
At present, the Latvian state, through Possessor, owns 51% of Tet, while Tilts Communications, a subsidiary of Telia, owns the remaining 49%. In LMT, Telia and its subsidiary Sonera Holding together own 49%, LVRTC owns 23%, Tet owns 23%, and Possessor owns the remaining 5%.
Following the acquisition of Telia’s shares and the entry of a strategic investor, Latvenergo, LVRTC, Possessor and the new strategic investor are each expected to hold approximately 25% of both companies.
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