Russia prepares for giant sale of assets
RUSSIA is understood to be planning its biggest sell-off of state assets since the early 1990s as it seeks to raise over $29bn (£18.8bn) to plug budget gaps over the next three years.
According to finance ministry sources quoted by Reuters, the plan to sell minority stakes in 10 major companies in 2011-2013 had been discussed and approved at a preliminary meeting chaired by Prime Minister Vladimir Putin.
The sales would include 27.1 per cent in monopoly state oil pipeline Transneft, 24.16 per cent of Russia’s largest oil producer Rosneft, 24.5 per cent of number two bank VTB, 9.3 per cent of largest lender Sberbank and 25 per cent minus one share of rail monopoly RZhD.
Russia wants to cut its budget deficit to 4 per cent of GDP in 2011 and 2.9 per cent in 2012 from around 5 per cent – or $80bn – this year, but a presidential election in 2012 has put pressure on the government to keep social spending high.
“The finance ministry has made proposals on possible privatisations in 2011-2013, which will allow [us] to collect some 300 billion roubles (£6.4bn) a year,” one of the sources told Reuters.
“The biggest companies will be up for sale in such a way that the government keeps controlling stakes,” he added. “The proposals were reviewed and judged realistic.”
The proposals see Russia reducing its stakes in most of the companies to 50 per cent plus one share, which allows the government to still exercise full control over the decision-making process.