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On ownership unbundling of transmission system assets
Riga, 2019-12-11 10:49 CET --
As previously reported, on 8 October 2019, the Cabinet of Ministers of the Republic of Latvia passed a decision to complete the ownership unbundling of the electricity transmission system operator by 1 July 2020, transferring all assets of the electricity transmission system owned by Latvijas elektriskie tīkli AS, a subsidiary of Latvenergo AS, to transmission system operator Augstsprieguma tīkls AS. As part of the process, it is planned to transfer both the transmission system assets owned by Latvijas elektriskie tīkli AS and the real estate belonging to the transmission system owned by Latvenergo AS and the liabilities related thereto.
In order to carry out the unbundling of transmission system assets in accordance with the above, on 10 December 2019, the Shareholders’ Meeting of Latvijas elektriskie tīkli AS passed a decision to increase the share capital of Latvijas elektriskie tīkli AS by EUR 9.5 million by investing the real estate belonging to the transmission system (EUR 35 million) and liabilities related thereto (borrowings for asset financing - EUR 26 million). The property investment, which until now was owned by Latvenergo AS, was assessed by KPMG Baltics AS.
The transmission assets leasing segment is the smallest segment of Latvenergo Group both by income and EBITDA. The turnover of this segment in the first 9 months of 2019 amounted to 5% of the Group’s income and 15% of the Group’s EBITDA. The total assets of Latvijas elektriskie tīkli AS on 30 September 2019 amounted to EUR 616 million (16% of the Group’s assets), equity – EUR 222 million, borrowings – EUR 165 million, number of employees – 8.
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Latvenergo Group is one of the leading energy suppliers in the Baltics operating in electricity and thermal energy generation and trade, natural gas trade, electricity distribution services and lease of transmission system assets. Latvenergo AS has been acknowledged as the most valuable company in Latvia for several times. International credit rating agency Moody's has assigned Latvenergo AS an investment-grade credit rating of Baa2/stable.
Latvenergo Group is comprised of the parent company Latvenergo AS (generation and trade of electricity and thermal energy, trade of natural gas) and seven subsidiaries - Latvijas elektriskie tīkli AS (lease of transmission system assets), Sadales tīkls AS (electricity distribution), Elektrum Eesti OÜ (trade of electricity and natural gas in Estonia), Elektrum Lietuva UAB (trade of electricity and natural gas in Lithuania), Enerģijas publiskais tirgotājs AS (administration of mandatory electricity procurement process) and Liepājas enerģija SIA (generation and trade of thermal energy in Liepaja, electricity generation). All shares of Latvenergo AS are owned by the state and held by the Ministry of Economics of the Republic of Latvia.