News / Economy

    Russia Hopes to Raise $5.5 Billion from Privatizations in 2014

    A Lenta supermarket sign is pictured in Moscow. Russian hypermarket chain Lenta, part-owned by U.S. private equity firm TPG, has set a price range for its planned London market debut, which implies a market valuation of up to $5 billion, Feb. 3, 2014.
    A Lenta supermarket sign is pictured in Moscow. Russian hypermarket chain Lenta, part-owned by U.S. private equity firm TPG, has set a price range for its planned London market debut, which implies a market valuation of up to $5 billion, Feb. 3, 2014.
    Reuters
    Russia's prime minister said on Monday he hoped to raise more than $5.5 billion this year by selling stakes in state companies, reviving a delayed privatization program that could spur a flagging economy.
     
    At a meeting with deputy prime ministers, Dmitry Medvedev also sounded a note of caution, saying the sale of shares in companies such as Rostelecom or shipping group Sovcomflot could happen only in good market conditions.
     
    Launched in 2010 by then Finance Minister Alexei Kudrin, the $50-billion privatization drive to reduce the state's direct role in the economy and improve a much-criticized investment climate has been dogged by delays.
     
    Assets have since been removed from the lists, prey to volatile markets and a tug-of-war between more liberal-minded politicians and hardliners favoring a slower approach to privatization.
     
    “Just this year, we have a quite serious privatization plan to raise 200 billion roubles ($5.7 billion), and I hope that these plans will be fulfilled,” Medvedev told the meeting.
     
    “[The approach to privatization] should be balanced. We should not delay but at the same time we should consider the economic circumstances in the world and in the country.”
     
    Russia's economic growth has slowed, reaching just over 1 percent last year after hitting an average 7 percent before the 2008/09 financial crisis. Privatization revenues would help meet generous election promises made by President Vladimir Putin.
     
    Last June, Russia halved its privatization target for 2014 to around $5.5 billion after many previously planned sales were stalled because of adverse market conditions.
     
    The results of the sales so far have been mixed.
     
    Divisions

     
    Sberbank, Russia's largest bank, attracted strong investor demand for its stake sale in 2012, raising more than $5 billion, and the country's second-largest bank, VTB, last year won sovereign backing for a $3.3 billion share issue.
     
    But a 16 percent stake in state diamond miner Alrosa was priced at the bottom of a planned range, valued at $1.3 billion, in October.
     
    The main sell-off penciled in for 2014 is a stake in Rosteleom, which competes with Russia's three main private mobile operators - MTS, Megafon and Vimpelcom . Rostelecom recently merged its mobile assets with VTB's Tele2 Russia mobile unit into a single company, T2 RTK Holding.
     
    Olga Dergunova, head of the State Property Agency, told the meeting Russia expected to receive 150 billion roubles from that sale and the privatizations could start in the second quarter with Sovkomflot. She did not disclose the amount expected to be sold in Rostelecom.
     
    State capitalists such as Igor Sechin, the head of state energy company Rosneft and a long-time ally of Putin, oppose privatization - including of his own company.
     
    The state had been planning to sell its stake in Novorossiisk Commercial Sea Port (NCSP) by the end of 2013. Rosneft asked Putin in October to sell it the state's 20 percent stake.
     
    A further stake in VTB is due to be sold in 2015.

    You May Like

    Self-doubt, Cultural Barriers Hinder Cambodian Women in Tech

    Longtime Cambodian tech observer Sok Sikieng says that although more women have joined profession in recent years, there remain significant factors hindering women from reaching tech potential

    Trans-Adriatic Pipeline to Boost European Energy Security

    $4.5 billion-pipeline will become operational in 2020 and will deliver gas from Azerbaijan’s Shah Deniz II field to southern Italy

    Video California Celebration Showcases Local Wines, Balloons

    Annual festival showcases the region's harvested agriculture, fine wines and offers opportunities to experience the gentle breeze in a hot air balloon flight

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8954
    JPY
    USD
    109.74
    GBP
    USD
    0.6851
    CAD
    USD
    1.3148
    INR
    USD
    67.673

    Rates may not be current.