Latvijas Gāze, JSC: Parliament Lists Distribution Operator Among Merchants Critical to National Security
On March 23, 2017, the Parliament (Saeima) approved amendments to the National Security law whereby the distribution system operator of Latvijas Gāze is included in the list of commercial companies critical to the national security.
When the law takes effect, the owners of shares of the distribution operator (currently the shareholders of Latvijas Gāze) will have to approve ownership with the Cabinet of Ministers if the number of shares owned reaches 10% of the fixed capital, if a decisive influence or control over more than 50% of voting rights is gained, if the company or an independent part thereof is transferred into ownership or use of another person, if the shareholder owns at least 10% of shares of the merchant and there is a change of the shareholder’s final beneficiary. These requirements will not apply to the current structure of shareholders, and the approval of the Cabinet of Ministers will only be required in the event of changes.
Under the law, if a shareholder intends to acquire a qualifying holding or a decisive influence in Latvijas Gāze, it will have to seek permission of the Cabinet of Ministers before the transaction. However, if there is an intention to transfer the distribution operator or parts thereof to another company, the distribution operator itself will have to seek permission of the Cabinet of Ministers. In the event of a change of the final beneficiaries, the shareholder will have to submit a notice thereof within five days from the change.
The law stipulates the procedure of notification and assigns the Cabinet of Ministers with drawing up a more detailed procedure of approval. Latvijas Gāze will notify its shareholders in detail of the procedure of notification as soon as the Cabinet Regulations are available. Under Article 14 of the Transitional Provisions, by June 1, 2017 Latvijas Gāze shall notify the Commercial Register and the shareholders of its compliance with the status or merchant critical to the national security, supplement the register of shareholders with information on such status, and notify the institution designated by the Cabinet of Ministers of its shareholders and persons exercising an indirect holding (voting rights), and the final beneficiaries – natural persons who directly or indirectly have a qualifying holding in this commercial company.
The law will take effect on the next day after announcement. As soon as the law takes effect and as long as the distribution system operator is part of Latvijas Gāze, the requirements will apply to Latvijas Gāze and its shareholders. When the distribution system is separated, the requirements will apply to the separated commercial company and its shareholders.
Investor relations manager
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