Latviski English По-русски
Friday 21.10.2016 | Name days: Severīns, Urzula

Ventspils nafta deal: how much does it hurt Lembergs?

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe buyback offer for Ventspils nafta stocks extended by Euromin Holdings Limited has begun. Aivars Lembergs has decided to take active part in the discussion of this matter. It seems that Lembergs’ main reason for concern lies not in his possible continued participation in the future of the company, but exactly the opposite – the thought of losing control and his futile attempts to regain control over transit business.

As it is known, Euromin was obligated to extend a buyback offer for other VN stockholders after purchasing 43.25% of VN stocks for EUR 79.98 million. This deal provided Euromin with 93.24% of all stocks in VN.

Discussions about the deal and the price

President of the Boards in Ventbunkers and Latvijas Naftas tranzīts, Swiss lawyer Rudolf Meroni, who is also entrusted with managing assets owned by Lembergs family while Aivars Lembergs’ criminal case is being viewed, notes that nearly EUR 80 million for 43.25% of VN stocks is an adequate price.

«The price at which VN stocks were sold exceeds every price that has appeared on stock markets in the past two to three years by 50%,» – explains Meroni.

Meroni’s words are further confirmed by information from the company. According to stock price tables, the rice of VN stocks had only just exceeded EUR 1 in September. The sudden price rise of 73% on 10 September is the largest single-day price rise in the company’s history, which, according to Euromin, was unjustifiably taken into account by the Finance and Capital Market Commission when it made the decision to set the buyback price (EUR 4.56).

«Last week’s price fluctuations have no connection with the [Euromin] deal. Those were deals involving several hundred stocks and they have no real impact in the true value of the 45 million stock bloc,» – said Meroni, adding that the price agreed upon by LNT and Euromin fully complies with the upper range value recognized by hired experts.

Ventbunkers Board member Edgars Ciniņš also notes that this deal is a logical step in the development of VN.

«I believe recently voiced speculations regarding the deal and the price and unjustified and based purely on delusions. I have no doubts about the transparency of this deal and its contribution to the company’s interests,» – said Ciniņš.

Relations between Ventbunkers and Ventspils nafta have been «more than tense» for many years. Hard work has made certain the two companies are trusted partners. It is clear that they will work together to develop Ventpils Freeport.

«I cannot understand why anyone would want to challenge this deal, unless, of course, it is done solely because of unknown personal interests. I believe everyone will benefit from this deal – the sides involved, the small shareholders in VN, Ventspils Freeport and Latvia’s transit industry as a whole,» – he adds.

VN Board President Roberts Kirkups told Bloomberg that the sudden rise in stock prices, which affected FCMC’s assessment, is not in any way related to the company’s value. It is more likely related to attempts of some people to make the deal look uncompetitive.

As reported by Delfi, the only person to have publicly criticized the recent VN deal is none other than Aivars Lembergs.

Where do ‘legs end’

Lembergs is the one to have mentioned a ‘property theft scheme’. It is unknown, however, if he can be trusted in this, considering his own ‘experience’ in this area.

It has been proven time and time again that Lembergs has a deep interest and involvement in Ventspils transit schemes.

This is proven by transcripts of a wire-tapped telephone conversation in Copenhagen published by, in which it is mentioned that Lembergs has been the biggest owner of Ventspils transit companies for years, countless documents depicting ‘transit wars’ in Latvia, Lembergs’ arrested properties and relationships with shareholders of transit companies.

The wire-tapped Copenhagen telephone conversation also details how Lembergs discussed massive purchases, decided on solutions for situations in different Ventspils companies and how he found time for political consultations and discussion regarding election financing with then the Prime Minister of Latvia Aigars Kalvitis.

The future of transit wars

The situation in Latvia’s transit business has changed. People are currently trying to sort out the consequences that surfaced as a result of transit wars. One step to resolve the situation was the VN deal.

Even Ventspils businessman Olafs Berkis, who had previously been Lembergs’ supporter and opponent, now believes that the price of VN stocks was an optimal compromise: «I never thought the price was too low, especially considering dynamics we observed in previous years. Considering that Ventbunkers’ investments in VN through LNT has been sufficiently large over the years, but has not given us any returns over those years, the deal was a logical and economically-justified step.»

Initially the deal was supposed to go on for a couple of weeks. Unfortunately, confidential and market-influencing information was leaked and published in September. This is why it was decided to «do everything it takes to re-stabilize the market».

Euromin and LNT have done a lot of work in order to overcome obstacles and finish the sale of VN stocks this week. «It was necessary in order to avoid potential trading [with stocks] by certain people,» – said Meroni.

The loudest ‘reporter’ is Lembegs, whose dislike of Meroni is loudly reflected in criticisms of this deal. Lembergs continues announcing Meroni’s alleged personal benefits from the VN deal.

What is interesting in this whole situation is that even Lembergs’ personal newspaper with an ironic name ‘Neatkarīgā Rīta Avīze’ has become an active opponent of the VN deal. The newspaper continues scaring pensioners and mentioning other ‘thinkers’ who dislike this deal.

It should be added that Delfi named Oleg Stepanov as the ‘first person to lose the most in the decade-long transit war in Latvia’s business environment’. It is entirely possible that the peaceful resolution of the court process in England may have cost Stepanov USD 20 million. It is possible that Lembergs may become the second largest loser in this ‘transit war’.

Leave a reply

The first container train headed for Riga departs from China

On Thursday, 20 October, Latvian Transport Minister Uldis Augulis, representatives from LDz and YXE International Container Train, multiple Chinese officials and Latvia’s ambassador in China Maris Selga saw off the first test container train from China to Riga.

Customs officials intercept hashish shipment worth EUR 2 million

Latvian State Revenue Service’s Customs Police intercepted and confiscated a shipment of more than 200 kg of hashish worth EUR 2 million, as journalists were informed by SRS Customs Police Director Kaspars Podins on Thursday, 20 October.

SA: Riga Freeport has only realized one of five of our recommendations

Latvian State Audit follows the development of the largest investment projects especially carefully, because the state does not seem to handle them all that well. Krievu Island project is one of the largest investment projects, because there is European Union finances invested in it...

Job seekers in Lithuania want Western salaries, employers dumbstruck

Although Lithuanian labour market is in desperate for workforce, but those willing to toil will nod to a job offer only if the pay is really big. So big that the country‘s hirers feel like grabbing their heads upon hearing the candidates‘ salary expectations.

Overall government budget decreased in 2015

In 2015, the general government budget deficit amounted to EUR 309.0 million or 1.3% of the gross domestic product, whereas the general government consolidated gross debt amounted to EUR 8 846.3 million or 36.3% of the GDP.

SP: claims about Motorola’s murderer are an attempt to show Latvia as the enemy

Latvian Security Police views claims that Donetsk military commander Arseny Pavlov, aka Motorola, was allegedly killed by a hired killer from Latvia named Marks Ozolins is nothing more than yet another attempt at information war aimed to demonstrate Latvia and its citizens and enemies.

Estonian President Kaljulaid not to ask state to pay rent

Estonia’s new President Kersti Kaljulaid will not ask the state to pay rent for using her home unlike the former head of state Toomas Hendrik Ilves did.

Every third coin with Milda’s image has made its way to Europe

Every third euro coin with Milda’s image has found its way to Europe. The proportion of those coins in Latvia is 71% of all euro coins in circulation, according to monitoring data compiled by Citadele Bank’s CBL Cash Logistics service.

Estonia plans to increase female proportion in military

Estonia has announced plans to triple female involvement in the country’s Defence Forces and to expand the list of units accessible to woman soldiers by 2018.

Pre-paid mobile card users to be registered as part of a plan to reduce grey economy

At the meeting of state secretaries on 20 October, a proposal was presented from the transport ministry to begin registration of mobile pre-paid card users.

Next year’s budget plan and other decisions viewed by Saeima this week

On Thursday, 20 October, the Saeima will gather for an extraordinary meeting, during which deputies will discuss the next year’s budget plan and 57 associated legal drafts.

European Space Agency attempts to re-connect to its Mars probe

The European Space Agency has lost contact with its Mars probe on October 19 shortly prior to its planned landing on the planet.

Klauss withdraws from SRS personnel selection process

Kristaps Klauss, executive directors of Latvian Forest Industry Federation, has decided to withdraw from State Revenue Service’s personnel selection process.

Lembergs to continue testifying in court at the end of October

Aivars Lembergs, who is accused of serious crimes, will continue testifying in his own criminal case on 31 October, as confirmed by Riga Regional Court’s press-secretary Raimonds Locmelis.

Germany: No miracles accomplished at Normandy quartet negotiations in Berlin

Following the October 19 summit talks in Berlin over ending the Donbas War, German Chancellor Angela Merkel has evaluated that no miracles have been accomplished.

Rumours state Donetsk militant commander Motorola was killed by Latvian mercenary

On Wednesday, 19 October, rumours began surfacing on Ukrainian and Russian websites that Donetsk pro-Moscow militant commander Arseny Pavlov, aka Motorola, was possibly killed by Latvian mercenary named Marks Ozolins.

Clocks to be turned one hour back at the end of October

Daylight saving time will end in Latvia and elsewhere in the world on 30 October, when clocks will have to be turned one hour back.

More than half of businesses in Latvia have a website

63.5% of enterprises in Latvia had a website at the beginning 2016, which was 4.5 percentage points more than in 2015. Similarly to previous years, at the beginning of the present year a website was set up by most of the accommodation service and information and communication service providers.

Maxima in Estonia also attracts Latvians tackling shortage of workers

With many retailers in Estonia struggling to find workers for modestly-paid jobs, Lithuanian retail giant Maxima is attracting Estonians for afar and even Latvians to fill the vacant places.

Russia plans to apply discount on transit from Belarus equal to tariffs for Baltic ports

Russian Railways plans to consider the possibility to apply 25% discount for petrol, diesel fuel and crude transit from oil processing plants in Belarus to Russia’s north-west ports. This would provide tariffs equal to those applied for Baltic ports, as reported by Kommersant.

Grybauskaitė: Deploying Iskanders to Kaliningrad – agressive move against European capitals

The sending of nuclear-capable Iskander rockets to Russia’s western-most territory in Kaliningrad is an aggressive move against Europe’s capitals, evaluated Lithuanian President Dalia Grybauskaitė on October 18.

Dzintars: two crises in a row caused major decline in volume of sales

Legal protection process is a voluntary choice of the debtor if they experience financial difficulties but wish to continue economic activities. Two consecutive crises of 2008 and 2014 caused a sharp decline in the market and resulted in a deficit of turnover funds, notes Dzintars cosmetics manufacturer board member Dagnija Maike.

Names of SRS manager selection contest candidates become known

Candidates that have made it to the third stage of the selection process for the post of director general to the State Revenue Service include Andris Nikitins, Kaspars Rumba, Kristaps Klauss and Ilze Cirule, as reported by Panorāma programme of LTV.

EC: Rail Baltica route’s crossing of Vitrupe Valley is unacceptable

The European Commission urges Latvia to comply with environmental protection acts and take into account the report of its environmental institutions on how it is unacceptable to allow Rail Baltica’s Salacrgiva section to go through Vitrupe Valley.

Belgium seeks to convince Wallonia region over Ceta

Belgian Minister of Foreign Affairs Didier Reynders has stated on October 18 that European Union member states could reach an agreement on the EU-Canada trade deal in case the objections of the Belgian region of Wallonia can be met.