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Latvian government thinks about Ruhrgas' stake in Latvijas gaze

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Staff writer ▼ | April 9, 2014
Latvijas gazeThe Latvian government could decide by the beginning of May whether to buy German company E.ON Ruhrgas' stake in the gas supply company Latvijas gaze, Economy Minister Vjaceslavs Dombrovskis (Reform Party) told the TV3 television, reports LETA.


The Latvian State Television previously reported that the German company was planning to sell its stake in Latvijas gaze and to withdraw from the Baltic market altogether, which is why the Economy Ministry is considering buying E.ON Ruhrgas interest in Latvijas gaze or allowing Russia's Gazprom to become a majority shareholder in Latvijas gaze.

At the moment, E.ON Ruhrgas owns 47.2% of Latvijas gaze shares, Russia's Gazprom has a 34% stake and Itera Latvija 16%.

E.ON Ruhrgas announced leaving the Latvian market during a Latvijas gaze shareholders meeting in Riga last week. The German company refused to comment on its move.

"We are looking at our options," said Mr. Dombrovskis. "This includes buying the E.ON shares by the state of Latvia. However, I have no news to tell you at the moment as it is the Cabinet of Ministers that will take the final decision."

The minister admitted that the government would not like the German company's shares in Latvijas gaze to be acquired by Gazprom or some other lesser-known buyer. "We will be considering the possibility of buying the shares," Mr. Dombrovskis said.

The nominal value of Latvijas gaze shares is EUR 1.42, however, the company is generating significant profit, which means that the actual price for "E.ON" shares in Latvijas gaze should be much higher. Also, it is the other Latvijas gaze shareholders that have the right of first refusal on the shares, and only if they refuse to buy the shares could the state apply for becoming a Latvijas gaze shareholders.

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