Latvian Shipping Buy Rules May Be Eased

Latvia may drop certain key conditions in a fresh attempt to privatize Latvian Shipping but could keep the offered stake at 68 percent. Latvia's cabinet officially admitted defeat on Tuesday in its fourth attempt to sell the sea cargo firm and ordered the economy ministry to draw up a new tender for its privatization. "The variant offered could contain giving up on the strategic investor, but I do not see any arguments why we should give up the current stake (to be offered)," privatization agency head Janis Naglis said. Naglis said giving up on a strategic investor meant scrapping several key requirements, including future investments, keeping the firm in the shipping business and limits on reselling it. Without these requirements, the potential range of bidders could widen. The last plan was to sell 68 percent to a strategic investor and then another 15 percent by public offering. In the last tender the two final bidders failed to submit a bid bond to take part in the auction that was set for May 11. The two bidders were Italy's d'Amico Societa di Navigazione S.p.A. and FAL Oil Company Ltd. of the United Arab Emirates. Naglis said d'Amico had submitted a preliminary offer of $22.4 million and FAL $70 million before the state set the minimum auction price at 70 million lats ($111.2 million). The Dutch consultant in the Latvian Shipping sale, BDO New Markets, had advised the government to set the minimum auction price for the 68 percent stake either at $70 million or $100 million. Naglis said that before the cabinet decided to restart the privatization with new rules, FAL had expressed interest in further participation in the sell-off and possibly increasing its offer. He could not say whether FAL was still interested. - (Reuters)