Russia plans sell-off of big state firms: reports

26th July 2010, Comments 0 comments

Russia is planning a major sell-off of stakes in state-owned firms in a new privatisation drive planned to rake in 29 billion dollars for the government, reports said on Monday.

Large stakes would be sold in Russia's largest oil producer Rosneft, its biggest bank Sberbank and national pipeline owner Transneft, the reports said. However the state would keep a controlling stake in all the firms.

"The ministry of finances is proposing to sell stakes in state firms and banks, keeping control in them," a source told the RIA Novosti news agency. "For the moment, the final decision has not been made."

The plan set out by the finance ministry envisages selling 27.1 percent of Transneft, 24.16 percent of Rosneft and 9.3 percent of Sberbank.

All these companies have already been part-privatised but the privatisation drive would also see the sale of 25 percent minus one share in railways operator RZhD, currently 100 percent owned by the government.

RIA Novosti said that the sale was expected to bring in around 300 billion rubles (10 billion dollars) each year between 2011-2013 for a total of 883.5 billion rubles (29.1 billion dollars) over the next three years.

Other big firms involved in the sale -- expected to include a total of 10 state-owned companies -- include state bank VTB and hydro-electric power operator Rushydro.

Business daily Vedomosti said the proceeds from the sale would be used to shrink Russia's budget deficit, which ballooned during the economic crisis after years of surpluses in the good times.

Prime Minister Vladimir Putin has earmarked cutting the deficit as a priority for the government and Finance Minister Alexei Kudrin is targeting public deficits equal to four percent of Gross Domestic Product in 2011, three percent in 2012 and two percent in 2013.

Russia largely halted privatisation after chaotic sell-offs of state owned resources of the 1990s which critics said handed over large swathes of its huge natural wealth to a clique of oligarchs at knock-down prices.

However, officials have over the last year have indicated a rethink of Russia's strategy, partly due to the impact of the economic crisis which hit its hydrocarbon-dependent economy hard.

© 2010 AFP

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