The Latvian Shipping Company (Lasco), has finally fulfilled its long-held desire to privatize. After five years and four attempts at privatization, the government has sold 51% of its shares for Lats35.7 million ($59.3 million), putting the share price at Lats0.35. Lasco listed on the Riga stock exchange on July 1 and started trading at Lats0.30.
Lasco’s initial attempt to sell foundered as it looked for strategic investors that would provide new management, marketing skills and additional investment. Lauri Lind, head of equity trading at Hansabank in Estonia, says: “They came to the conclusion that there were no strategic investors willing to pay the price they wanted so they decided to do an IPO instead.” Lasco declined to comment but Talis Linkaits, head of administration at the Latvian Privatization Company, says: “Unfortunately, the sales price set by the government was higher than investors were willing to pay.” Before the sale of 51% of its shares the company sold 32% of the company through privatization vouchers. Now that it has listed, investors will be able to convert vouchers into shares. A further 6% will be sold to Lasco employees and pensioners and 10% will remain with the state pension fund, with 1% to be reserved for corrections and eventually sold through the exchange.
The domestic issue was offered through the stock exchange so no local bookrunners were required. The international tranche involved an offering of global depositary receipts. The book was built by Williams de Broë and international investors have taken up 38.57% of the shares offered.
The Riga exchange acted as adviser and organizer of the sale by the privatization agency. Local investment house Suprema Securities and Williams de Broë also formed part of the consortium.
Roberts Idelsons, a director at Suprema, says: “Both the domestic and the international tranche of the Lasco share offering ran extremely successfully – the vivid interest of the investors is evidence. In the domestic tranche the Lasco shares were oversubscribed by 5.8 times while in the international tranche the oversubscription was 1.7 times.”
Since the international allocation of shares has been approved by Williams de Broë and the privatization agency, the international investment bank and the London Stock Exchange will decide on listing the GDRs on Seaq International, which could take up to three months. Once this has been completed investors will be able to exchange one GDR for 25 shares.
