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

US Imposes Sanctions on Alleged Honduran Drug Gang

Treasury department alleges Los Valles group is responsible for smuggling tens of thousands of kilograms of cocaine into US each month More

At 91, Marvel Creator Stan Lee Continues to Expand his Universe

Company's chief emeritus hopes to interest new generation of children in superheroes of all shapes and sizes by publishing content across multiple media platforms More

Photogallery New Drug Protects Against Virus in Ebola Family

Study by researchers at University of Texas Medical Branch, Tekmira Pharmaceuticals is first looking at drug's effectiveness after onset of symptoms More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
African Media Tries to Educate Public About Ebolai
X
George Putic
August 20, 2014 8:57 PM
While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video African Media Tries to Educate Public About Ebola

While the Ebola epidemic continues to claim lives in West Africa, information technology specialists, together with radio and TV reporters, are battling misinformation and prejudice about the disease - using social media to educate the public about the deadly virus. VOA’s George Putic has more.
Video

Video Ferguson Calls for Justice as Anger, Violence Grips Community

Violence, anger and frustration continue to grip the small St. Louis suburb of Ferguson, Missouri. Protests broke out after a white police officer fatally shot an unarmed black teenager on August 9. The case has sparked outrage around the nation and prompted the White House to send U.S. Attorney Eric Holder to the small community of just over 20,000 people. VOA’s Mary Alice Salinas has more from Ferguson.
Video

Video Beheading Of US Journalist Breeds Outrage

U.S. and British authorities have launched an investigation into an Islamic State video showing the beheading of kidnapped American journalist James Foley by a militant with a British accent. The extremist group, which posted the video on the Internet Tuesday, said the murder was revenge for U.S. airstrikes on militant positions in Iraq - and has threatened to execute another American journalist it is holding. Henry Ridgwell has more from London.
Video

Video Family Robots - The Next Big Thing?

Robots that can help us with daily chores like cooking and cleaning are a long way off, but automatons that serve as family companions may be much closer. Researchers in the United States, France, Japan and other countries are racing to build robots that can entertain and perform some simpler tasks for us. VOA’s George Putic reports.
Video

Video In Ukraine, Fear and Distrust Remain Where Fighting has Stopped

As the Ukrainian military reclaims control of eastern cities from pro-Russian separatists, residents are getting a chance to rebuild their lives. VOA's Gabe Joselow reports from the town of Kramatorsk in Donetsk province, where a sense of fear is still in the air, and distrust of the government in Kyiv still runs deep.
Video

Video Five Patients Given Experimental Ebola Drug Said to Be Improving

The World Health Organization has approved the use of experimental treatments for Ebola patients in West Africa. The Ebola outbreak there is unprecedented, the disease deadly. The number of people who have died from Ebola has surpassed 1,200. VOA's Carol Pearson reports on the ethical considerations of allowing experimental drugs to be used.
Video

Video China Targets Overseas Assets of Corrupt Officials

As China presses forward with its anti-graft effort, authorities are targeting corrupt officials who have sent family members and assets overseas. The efforts have stirred up a debate at home on exactly how many officials take that route and how likely it is they will be caught. Rebecca Valli has this report.
Video

Video Leading The Fight Against Islamic State, Kurds Question Iraqi Future

Western countries including the United States have begun arming the Kurdish Peshmerga forces in northern Iraq to aid their battle against extremist Sunni militants from the Islamic State. But there are concerns that a heavily-armed Kurdistan Regional Government, or KRG, might seek to declare independence and cause the break-up of the Iraqi state. As Henry Ridgwell reports from London, the KRG says it will only seek greater autonomy from Baghdad.
Video

Video In Rural Kenya, Pressure Builds Against Female Circumcision

In some Kenyan communities, female genital mutilation remains a rite of passage. But activists are pushing back, with education for girls and with threats of punishment those who perform the circumcision. Mohammed Yusuf looks at the practice in the rural eastern community of Tharaka-Nithi.

AppleAndroid

World Currencies

EUR
USD
0.7492
JPY
USD
102.27
GBP
USD
0.5960
CAD
USD
1.0950
INR
USD
61.300

Rates may not be current.