Russia’s government plans to sell stakes in its rail monopoly, grain trader, biggest shipper, nanotechnology holding and largest banks within 18 months as it loosens its grip on an economy dominated by commodity exports.
Prime Minister Dmitry Medvedev ordered officials to sell all of United Grain Co., half of OAO Sovcomflot and a quarter of 0A0 Russian Railways either this year or next year, according to a decree posted on the government’s website.
The state must also sell half of Rosagroleasing, 25.5 percent of OAO Bank VTB, 10 percent of nanotechnology holding OAO Rusnano and 7.6 percent of OAO Sberbank in the same period.
President Vladimir Putin and Medvedev, his predecessor, are reviving government efforts to lure investment and wean the economy off oil and gas, which account for about half of budget revenues, by selling what they deem non-strategic assets.
Putin pledged yesterday at the St. Petersburg International Economic Forum to push through asset sales while avoiding the mistakes of the 1990s, when Boris Yeltsin’s government sold some of the country’s biggest assets at a fraction of their market value, creating a class of politically connected billionaires overnight.
By 2016, the government must sell all of its shares in hydropower producer OAO RusHydro, Russian Agricultural Bank or OAO Rosselkhozbank, airline OAO Aeroflot, oil producer Zarubezhneft, electricity producer and distributor Inter RAO UES, Sheremetyevo Airport and diamond monopoly OAO Alrosa, according to the decree.
“The specific dates and methods of privatization of these companies will be determined by the government of the Russian Federation, taking into account market conditions and the recommendations of leading investment consultants,” Medvedev said in the decree.
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