FINANCIAL ANALYSIS
by Chris Weafer
- Preliminary reports say that the state's revised privatization plan aims to raise at least $120 bln over a five year period according to media reports.
- An important part of the revised programme is that the state plans to sell all of its equity in some companies that are part of the existing privatization programme, e.g. in Rosneft and RusHydro, retaining only a Golden Share veto.
- Other, already listed companies to be added to the revised privatization programme and which the state may sell all of its equity include Aeroflot, INTER RAO, MRSK Holding and Rostelecom.
- The sheer volume of planned State sales will present a considerable challenge. But it also raises hopes that the government will continue to aggressively pursue improvements in the financial infrastructure and efforts to improve the perception of Russia risk by foreign portfolio and strategic investors. Otherwise such an ambitious programme will hardly be successful.
- Such an aggressive plan will make it more difficult for private issuers to raise money.
- Despite the overhang of new issuance, the programme is a potential major positive for the market because state companies will be under pressure to make themselves more attractive to investors in the coming years.
- Sberbank is expected to be the next company in which the state sells equity, probably in the autumn, and Rosneft may be the big issue in 2012
To read the full note, click here Download Russia_Privatizations
Comments