Privatization back on the agenda of state looks to offload stakes

The Russian government has dropped Russian railways and the Federal mortgage agency, from the list of companies it is preparing to sell stakes in, and in the process raise $29 billion.

Only months ago some said Russia no longer deserved its position as a leading emerging market.
A new inflow of foreign investment could change that perception. But the government has work to do, before it can sell some of these companies. Some state monopolies are known to be unfriendly to individual investors. Others are simply too big to be easily sold according to Vladimir Kuznetsov, Equity analyst from Unicredit Securities

“If we talk about large stakes as Rosneft, that can cost $20 billion or more or VTB’s pretty large stake, it’ll take serious effort from the Government to make them suited for investors to sell it at a fair price.”

The pricing of the assets – and the timetable – are unclear. The government initially suggested about $30 billion over 3 years. Analysts say the government has a choice. It can sell quick and cheap. But to get the best price the privatization could stretch over several years.