Announcements

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 systemowned 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.