HELSINKI, Finland—The Lithuanian state is examining a proposal presented by the National Property Fund (NPF) to divest a 5-percent equity stake in Lietuvos Telekomas, Lithuania’s mobile and fixed telecom monopoly. Lietuvos Telekomas is 60-percent owned by the consortium of Finland’s Sonera and Sweden’s Telia.
Significantly, the Nordic telecom companies said they would not use the proposed divestment to offload shares in Telekomas, which has seen the value of its shares fall dramatically since May 2001. The share divestment, due to take place later this year, is targeted at Lithuanians under an approved government scheme.
In a pre-agreed move reached with the Lithuanian government, Sonera and Telia bought into Lietuvos Telekomas during the company’s initial public offering (IPO) in June 2000. The Lithuanian state sold a 25-percent shareholding at that time.
The Lithuanian government’s decision is not expected to cause either Telia or Sonera to downsize their investments in Lietuvos Telekomas, which is considered a long-term commitment encompassing the rollout of third-generation (3G) services in 2003.
Lithuania’s cash-strapped government has asked the NPF to estimate how much the state could expect to generate from the sale. The state holds 10 percent of all shares in Lietuvos Telekomas.
Shares released from the divestment will be used to finance the State Property Restitution Program (SPRP) under which the state has pledged to return land confiscated during World War I to its original owners or their authorized descendants. More than US$70 million has been paid out under the scheme since 1992. This equates to some 40 percent of the total cost of financing the program.
“We had planned to offer cash instead of shares in state companies as compensation to validated land owners under the program. Now we regard shares in state companies as the best available option,” said Finance Minister Dalia Grybauskaite.
