Latvia sells last stake in oil industry for 130 million dollars

Oct 5, 2006, 15:46 GMT

Riga - The Latvian state sold off its final stake in the nation's Soviet-era oil infrastructure for a price of just over 130 million dollars on Thursday.

At an open auction hosted by the Riga Stock Exchange, the state's holding of over 40 million shares (38.62 per cent) in the oil-transit management company Ventspils Nafta was sold for a price of 1.84 lats (3.33 dollars) per share.

The total sum raised by the sale was 74.2 million lats (134 million dollars), marginally more than the minimum sum of 73 million lats the government had established.

'Every centime more made us about another 400,000 lats. We're happy with the result,' said Martins Jaunarajs, leader of the consortium of consultants which organised the sale.

Thirty-seven potential buyers bid for varying sizes of holding, the minimum purchase volume being set at 19,415 shares. The prices bid ranged from the state's minimum of 1.81 lats per share to 3.50 lats per share.

Organisers would not reveal how many bidders had succeeded in buying shares, nor who the winning bidders were. The sale was organised according to the Dutch system, whereby all shares are sold at the lowest price necessary for the holding to be cleared.

Ventspils Nafta controls two Soviet-era pipelines carrying crude oil and oil products from Russia to the Latvian port of Ventspils. The oil pipeline was closed in 2002 after a series of disputes with Russia, but the oil-product pipeline is still flowing.

The company also owns shares in Latvia's largest shipbuilding firm, Latvijas Kugnieciba, and in property, printing and publishing companies.

The largest shareholder (48 per cent) in Ventspils Nafta is a Latvian holding company, Latvijas Naftas Tranzits, which is in turn owned by the company managing oil transshipment in Ventspils, Ventbunkers.

Ventbunkers is owned by an offshore company, Yelverton Investments, whose ownership is unknown. A group of Austrian investors recently announced that they were interested in buying Ventbunkers, but no deal has yet been confirmed.