After hearing representatives of the LMT and the National Armed Forces (NBS), the members of the commission have decided to address the Cabinet of Ministers with a request to ensure that the Latvian state maintains “this unique potential for the development of military capabilities”.
At the meeting, LMT representatives presented the projects implemented by the company to the members of parliament.
The Press Service of the Saeima reports that LMT, in cooperation with NBS, has developed and tested both military environmental information technology and communication solutions, as well as drone programs, as well as provided a unique 5G test environment at the Ādaži military base, where annual NATO-level digital connectivity experiments DiBaX (“Digital Backbone Experimentation”). These experiments focus specifically on the use of fifth-generation mobile telecommunications and low-orbit satellites to support technology interoperability across all types of military missions – water, land, air, space and cyberspace.
LMT has also gained experience in Ukraine, as well as established partnerships with international partners of the defense industry, including “Rheinmetal”, “Patria”, “Saab”, “Kongsberg”, BAE Systems and others.
NDK chairman Ainars Latkovskis (JV) says that LMT’s co-owner Swedish telecommunications company “Telia” and the company’s “view of LMT’s development and values are diametrically different”.
“It is unacceptable that at a time when national security and defense is our common and unquestionable priority, we risk losing projects that are most directly related to improving the defense capabilities of the armed forces due to the lack of interest of Telia’s representatives,” Latkovskis was quoted in the statement.
NDK has one deputy from each faction of the Saeima – Latkovskis, Daiga Mieriņa (ZZS), Atis Švinka (P), Jānis Dombrava (NA), Edvards Smiltēns (AS), Igors Yudins (“Stability”) and Kristaps Kristopans (LPV).
It has already been reported that on July 16 this year, in a closed session, the government agreed on further scenarios in negotiations with the telecommunications company “Tet” and LMT’s other shareholder – “Telia”. The government instructed the Ministry of Economy (ME) to conduct these negotiations.
At one time, a complex management scheme of “Tet” and LMT was created, the change of which the two shareholders – the Latvian state and “Telia” – have so far not been able to agree on.
The state owns 51% of Tet’s shares in the person of “Possessor” SIA “Public assets manager”, while “Telia’s” subsidiary “Tilts Communications” owns 49% of “Tet’s” shares. On the other hand, 49% of LMT’s capital is owned by “Telia” and its subsidiary “Sonera Holding”, 28% by the State of Latvia through the Latvian State Radio and Television Center (23%) and “Possessor” (5%), while another 23% of LMT’s shares belong “Here”.
This theoretically means that through “Tet” the share of “Telia” in the capital of LMT is 60.3%, and the Latvian state – 39.7%. However, in practice this does not happen and in fact the state has decisive control over LMT as well, as it has the majority “Tet”. At the same time, it has slowed down a number of strategic decisions that require consensus.
“Telia” has offered to change this arrangement. Namely, LMT would buy the telecommunications business of “Tet” for the money, which would be separated into a separate company (conditionally “Tet Telco”), the two existing shareholders of “Tet” would be paid special dividends and “Telia” would sell its 49% share of “Tet” to the state, while would get the missing 1% share of LMT from “Tet”, as a result of which the two main shareholders – the state and “Telia” – would each own 50% of LMT. It is proposed to conduct an IPO later and to list 20% or more of LMT shares on the stock exchange. Both shareholders would sell part of their shares in the public offering. The top management of the companies would also be affected as a result of the transaction.
State officials have not officially commented on the offer, but have ruled out the possibility that the state could sell its shares. It is understood that the possibility of buying back the shares of LMT from “Telia” is even being considered.
The Ministry of Finance must prepare a report to the government with the results of the negotiations by October 15, including information on what the two shareholders have agreed on, as well as what the future path of these companies could be.