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

Photogallery Americans Celebrate Thanksgiving With Feasts, Festivities

Holiday traditions include turkey dinners, 'turkey trots,' American-style football and New York parade with giant balloons More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
South Africa Sees Male Circumcision as Way to Reduce HIV Infectionsi
X
November 28, 2014 3:31 PM
South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video South Africa Sees Male Circumcision as Way to Reduce HIV Infections

South Africa remains plagued by AIDS despite massive government and NGO efforts on prevention and life-sustaining Anti-Retro-Viral programs. But the country has opened up another front to reduce new HIV infections: promoting circumcision. Emilie Iob reports for VOA News from a pioneering circumcision center in Orange Farm, Johannesburg.
Video

Video To Make A Living, Nairobi Street Vendors Face Legal Hurdles, Physical Violence

The Nairobi City Council has been accused of brutality in dealing with hawkers in the Central Business District - in order to stop them from illegally selling their wares on the streets. Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8010
JPY
USD
118.31
GBP
USD
0.6371
CAD
USD
1.1397
INR
USD
62.122

Rates may not be current.