RIGA, Oct 19 (LETA) – The board of Latvijas Gaze natural gas utility has convened a foundation meeting for gas distribution system operator Gaso on November 22, according to the company’s statement to the Nasdaq Riga stock exchange.

Latvijas Gaze will be the sole founder and shareholder in the new company.

According to the draft Articles of Association, Gaso supervisory board will consist of 11 members, elected by shareholders for a term of three years. The executive board will consist of five members elected by the supervisory board for a term of three years.

The Articles of Association also say that the company is established pursuant to amendments to the Energy Law, which will come into force on January 1, 2018, providing for a spin-off of distribution system operator activities from joint stock company Latvijas Gaze into a separate legal company with an independent legal personality.

As reported, Latvijas Gaze shareholders decided at a meeting in August to demerge the company by the establishment of a distribution system operator - joint stock company Gaso.

According to the European Union directives and the Energy Law, Latvijas Gaze has to separate natural gas distribution and transmission systems by January 1, 2018. The natural gas transmission and storage functions were separated from Latvijas Gaze by the establishment of Conexus Baltic Grid in 2016, a company that is independent from Latvijas Gaze. On the other hand, natural gas distribution operator may be a subsidiary of Latvijas Gaze.

Latvijas Gaze's share capital is EUR 55,860,000, divided into 39,900,000 shares, each worth EUR 1.4. Latvijas Gaze shareholders are Gazprom (34 percent of shares), Marguarite Gas II (28.97 percent), Uniper Ruhrgas International (18.26 percent), Itera Latvija (16 percent), the state of Latvia (less than 0.01 percent of shares), and others.

Last year Latvijas Gaze generated EUR 392.266 million in sales, down 11.8 percent from 2015, and its profit rose 22.9 percnet to EUR 37.506 million.

Latvijas Gaze shares are quoted on the Secondary List of the Nasdaq Riga stock exchange.