Russia considers selling stakes in 30 state-owned firms
Bank advises the Kremlin to implement new economic growth model amid Western sanctions
21 December 2023 - 15:55
byAlexander Marrow and Darya Korsunskaya
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Russian finance minister Anton Siluanov. Picture: REUTERS
Moscow — The Russian state may reduce its shareholding in some large companies while maintaining a controlling stake, and has listed about 30 companies for possible privatisation, Russian finance minister Anton Siluanov said on Thursday.
Shunned by Western capital, Moscow is seeking ways to foster more domestic private investment, increase economic efficiency and, ultimately, bolster budget revenues as it ramps up spending to fund its war in Ukraine.
“The ministry has made proposals to the government on large companies where the state’s share is more than 50%, and proposed reducing the share without losing a controlling stake,” Siluanov said in an interview on Russia 24.
“And this could be tens, hundreds of billions (of roubles),” he said, adding that the list was with the government and still required further discussion.
“There are around 30 large companies where it is possible to consider lowering the state’s share and replacing it with private business.”
It was not immediately clear which companies might be included.
The state owns many companies outright, and Siluanov said the presence of private shareholders would reduce costs and stimulate companies to be more profitable.
New growth model
The idea of wider privatisation has been championed by Andrei Kostin, head of the state bank VTB, Russia’s second-largest lender.
Earlier this year, Kostin said Western sanctions had destroyed elements of Russia’s economy that had taken 30 years to build, and that it needed to create a new growth model through privatisations, reallocated budget funds and more state debt.
Kostin named the oil pipeline monopoly Transneft , Russian Railways, Russian Post and the state industrial conglomerate Rostec as possible candidates.
The government injected 162-billion roubles ($1.7bn) into Russian Railways in November, days after a handful of state-owned firms came cap in hand seeking financial support to cope with high interest rates.
Deputy finance minister Alexei Moiseev has previously said Russia needs to create a market of domestic investors as foreigners leave to avoid a repetition of the state auctions that led to the creation of oligarchs in the 1990s and a vast gulf between the ultrawealthy and ordinary Russians.
Separately, Russia’s largest producer of liquefied natural gas (LNG), Novatek, has sent force majeure notifications to some of its clients over future LNG supplies from its Arctic LNG 2 project, four industry sources said on Thursday.
Clients that received the notices include Chinese companies Shenergy Group and Zheijang Energy, as well as Spain’s Repso.
Novatek declined to comment on the situation.
The US last month imposed sanctions on Arctic LNG 2, which was due to start production before the end of this year or in early 2024.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Russia considers selling stakes in 30 state-owned firms
Bank advises the Kremlin to implement new economic growth model amid Western sanctions
Moscow — The Russian state may reduce its shareholding in some large companies while maintaining a controlling stake, and has listed about 30 companies for possible privatisation, Russian finance minister Anton Siluanov said on Thursday.
Shunned by Western capital, Moscow is seeking ways to foster more domestic private investment, increase economic efficiency and, ultimately, bolster budget revenues as it ramps up spending to fund its war in Ukraine.
“The ministry has made proposals to the government on large companies where the state’s share is more than 50%, and proposed reducing the share without losing a controlling stake,” Siluanov said in an interview on Russia 24.
“And this could be tens, hundreds of billions (of roubles),” he said, adding that the list was with the government and still required further discussion.
“There are around 30 large companies where it is possible to consider lowering the state’s share and replacing it with private business.”
It was not immediately clear which companies might be included.
The state owns many companies outright, and Siluanov said the presence of private shareholders would reduce costs and stimulate companies to be more profitable.
New growth model
The idea of wider privatisation has been championed by Andrei Kostin, head of the state bank VTB, Russia’s second-largest lender.
Earlier this year, Kostin said Western sanctions had destroyed elements of Russia’s economy that had taken 30 years to build, and that it needed to create a new growth model through privatisations, reallocated budget funds and more state debt.
Kostin named the oil pipeline monopoly Transneft , Russian Railways, Russian Post and the state industrial conglomerate Rostec as possible candidates.
The government injected 162-billion roubles ($1.7bn) into Russian Railways in November, days after a handful of state-owned firms came cap in hand seeking financial support to cope with high interest rates.
Deputy finance minister Alexei Moiseev has previously said Russia needs to create a market of domestic investors as foreigners leave to avoid a repetition of the state auctions that led to the creation of oligarchs in the 1990s and a vast gulf between the ultrawealthy and ordinary Russians.
Separately, Russia’s largest producer of liquefied natural gas (LNG), Novatek, has sent force majeure notifications to some of its clients over future LNG supplies from its Arctic LNG 2 project, four industry sources said on Thursday.
Clients that received the notices include Chinese companies Shenergy Group and Zheijang Energy, as well as Spain’s Repso.
Novatek declined to comment on the situation.
The US last month imposed sanctions on Arctic LNG 2, which was due to start production before the end of this year or in early 2024.
Reuters
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