Regarding unbundling of Latvijas elektriskie tīkli AS
Riga, 2020-06-10 16:14 CEST --
Yesterday, on 9 June, amendments were made in the Register of Enterprises regarding the reduction of the share capital of Latvenergo AS by 222,678,000 EUR, which resulted in a new share capital of Latvenergo AS amounting to 612,205,449 EUR (equity of Latvenergo AS as on 31 March 2020 was 2,034 million EUR). Today, on 10 June, shares of Latvijas elektriskie tīkli AS were transferred to the Ministry of Economics.
Thus, Latvijas elektriskie tīkli AS, the subsidiary of Latvenergo AS, has been separated from Latvenergo Group and the Latvian electricity transmission system owned by Latvijas elektriskie tīkli AS (330 kV and 110 kV power transmission lines, substations and distribution points) has been transferred to the state and then it is planned to invest it in the share capital of Augstsprieguma tīkls AS.
The unbundling of Latvijas elektriskie tīkli AS has not affected the credit rating of Latvenergo AS on the Baa2 level with stable outlook. Taking into account the planned unbundling, Moody's conducted an impact assessment and on 15 October 2019 affirmed the credit rating at its current level emphasising the positive competitive position of Latvenergo Group on the Baltic electricity market, efficient and environmentally friendly hydropower plants, the share of distribution revenues, as well as the strong financial situation.
As it was previously reported, the most common model of management of transmission network systems in European countries is the one where network assets are owned by the transmission system operator. Therefore, on 8 October 2019 the Cabinet of Ministers supported full ownership unbundling of the electricity transmission system operator until 1 July 2020.
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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 and electricity distribution services. 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 subsidiaries - 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.