April 7, 2014 / 6:23 AM / 5 years ago

Latvia considers buying E.ON's stake in gas utility -report

RIGA, April 7 (Reuters) - Latvia’s government is considering buying E.ON’s 47.2 percent stake in gas utility Latvijas Gaze, local television reported late on Sunday, citing the country’s economy minister.

Russia’s Gazprom owns 34 percent, and gas trader Itera Latvija has a 16 percent stake in the utility, which imports, transports and sells gas in the Baltic state. Russia is the sole gas supplier.

Existing shareholders have the right of first refusal to buy the shares from Germany’s biggest utility which plans to exit the Baltic markets.

“We are considering all options, including the option for the state to buy E.ON shares... We would not want to see the shares to fall into Gazprom or some other, not so well known, buyer’s hands,” Economy Minister Vjaceslavs Dombrovskis told TV3 television channel.

Dombrovskis said the government could make a decision on the matter in early May.

Riga-listed Latvijas Gaze has a market capitalisation of more than 370 million euros.

The utility also operates one of the largest underground gas storage businesses in Europe, Incukalns, which is capable of storing 2.3 billion cubic metres (bcm) of gas.

Latvia’s neighbor Lithuania has also said it is considering buying E.ON’s 38.9 percent stake in national gas transportation company Amber Grid.

German company also holds 33.66 percent of Estonia’s gas utility Eesti Gaas. (Reporting by Aija Krutaine; Editing by Nerijus Adomaitis and Edwina Gibbs)

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