Wed, Nov 17 2010
MOSCOW, Nov 17 (Reuters) - Russia has approved a plan to sell around 1 trillion roubles ($31.92 billion) in state assets including stakes in its two biggest banks and main oil producer, the government said on Wednesday.
Here are details of the biggest and most attractive companies. The size of the stake to be sold is in brackets:
Russia's biggest lender Sberbank has confirmed it will sell 9 percent of its shares -- including 3-4 percent in a public offer on the stockmarket -- in a deal that could raise $6.4 billion at current prices.
The $70 billion company, 60 percent owned by Russia's central bank, has around 20,000 branches and holds roughly half of all Russia's personal savings.
It managed to avoid making a loss during the financial crisis and is headed by German Gref -- a pioneer of economic reforms under Vladimir Putin's Presidency of 2000-2008.
SOVCOMFLOT (Unlisted, 25 percent)
Russia's economic ministry said earlier this month an IPO of a 25 percent stake in the state-owned shipping giant will take place next year.
Russia's largest shipping group specialises in oil transport and has 144 vessels.
Its 2009 net profit nearly halved to $217 million, while revenue fell 25 percent to $1.2 billion.
RUSSIAN RAILWAYS (Unlisted, 25 percent)
Russia will cede full control of its vast rail network when it sells 25 percent of RZhD (Russian Railways).
The company, which controls the world famous Trans-Siberian Railway and transports Russia's wealth of natural resources to the rest of the world, needs cash to improve aging Soviet infrastructure such as tracks and stations.
It raised $400 million via an initial public offering (IPO) of cargo unit TransContainer TRCNq.L earlier this month and may have generated as much as $4.8 billion by the time the divestment plan is completed. [ID:nLDE6A80K8]
AEROFLOT (AFLT.MM: Quote, Profile, Research) (minority stake est. 12 pct)
Russia's Finance Minister Alexei Kudrin said last month a minority stake in flagship airline Aeroflot (AFLT.MM: Quote, Profile, Research) could be sold in 2011.
The government owns just over 50 percent of the carrier and is expected to retain control at least until 2015, suggesting that an 11.8 percent stake owned by the central bank could be up for grabs.
Aeroflot remained in the black through the financial crisis, announcing a trebling of net profit to $86 million in 2009. Its shares are up 43 percent in the year to date, valuing the company at $2.7 billion.
Russia's largest oil producer Rosneft is 75 percent owned by the Russian government but the state could offload a 15 percent stake between 2011 and 2013.
The company, which supplies about a fifth of Russia's oil, saw third-quarter earnings soar to $2.57 billion from $1.16 billion the previous year on higher production rates.
Company directors have said a stake sale may be difficult without a major reform of Russia's oil taxation system.
The company's free float is just 15 percent. The rest of the stock is held as treasury shares, which it bought back after raising $10.6 billion in an IPO in 2006. Rosneft shares are down 16 percent in the year to date.
(Compiled by John Bowker and Conor Humphries; Editing by Erica Billingham) ($1 = 31.33 roubles)
EBRD: further modernization efforts needed to wean Russia off oil
November 18, 2010
Russia must improve its business and investment environment if it is to succeed in weaning the economy from its excessive dependence on oil and gas exports, the EBRD says in a report released on Wednesday.
The bank's Transition Report 2010, the latest edition of the annual publication which provides updates on the economies of all transition countries, says that Russia must boost its modernisation drive to raise service sector growth.
"Important steps have been made to facilitate progress toward the stated objective of turning Moscow into an international financial centre," the bank said its report, adding that further strengthening of banking supervision and regulation is needed.
The report also noted that although the economy appears to have turned the corner this year, it won't always be able to rely on having a stockpile of cash to protect it from the risks of an oil economy. GDP growth of 4% in the first half of 2010, following the economy's 7.9% contraction in 2009, was supported by a large fiscal stimulus.
"The challenge now is to consolidate the fiscal position without jeopardising the economic recovery," the report noted. The eventual depletion of the country's fiscal reserves will make the economy more volatile to swings in commodities prices and more must be done to raise efficiency, promote more effective competition, and follow best practice in corporate governance.
"Diversification of the economy away from excessive dependence on natural resources and modernising industry and services will depend on improving skills, creating an innovation-friendly environment through deregulation, and upgrading infrastructure," the bank said.
The EBRD also said that further power sector reform needs to be undertaken, specifically mentioning the privatization of distribution companies.