Shareholders of a huge Lithuanian company formed just 14 months ago to serve as a “national energy champion” voted on September 4 in Vilnius to liquidate it. The move marks the beginning of the end for Leo LT, which was technically the biggest company in the Baltics during its brief life, valued at around five billion litas (USD two billion). However, Leo LT will live on despite the vote as the process of unwinding the various complex agreements that created it could take a year or more, Deutsche Presse-Agentur (dpa) reported.
Since its inception Leo LT has been controversial. Public opinion saw the company, which involved many of the Baltic state’s top businessmen, as little more than a monopoly controlling the domestic energy market and underwritten by the state.
The European Union expressed concern that the company was anti-competitive at a time when national energy companies were supposed to be “unbundling,” or breaking up, their constituent parts. A European Commission investigation into the company is still ongoing.
Deputy Energy Minister Henrikas Bernatavicius said the vote proved the government would not go back on an election promise to wind up Leo LT and introduce more competition to the market. The state controls nearly two-thirds of shares in the company. “The government made it clear that all allegations that the state does not intend to liquidate Leo LT are unfounded,” Bernatavicius told reporters after the shareholder meeting.
Leo LT was formed from the merger of state-owned energy assets with two private energy companies. The company was supposed to take charge of the construction of various large-scale projects, including the construction of a new nuclear power plant to replace the Soviet-era Ignalina facility, and the building of energy links to Poland and Sweden.