State to Keep Rosneft and RusHydro in New Privatization Plan

Alexei Ulyukayev file photo

(RIA Novosti – MOSCOW, June 27, 2013) ­ Russian oil giant Rosneft, hydropower holding company RusHydro and the nation’s second-largest lender VTB Bank are among assets that should stay under state control, Economics Minister Alexei Ulyukayev said on Thursday after presenting the government’s new privatization plan for 2014-2016.

“Proceeding from the current state of world markets and problems with the sale of shareholdings at fair value, proposals have been made to adjust the privatization plans for some companies,” Ulyukayev said.

Under the new three-year privatization plan prepared by the Economics Ministry, the Russian government should keep a blocking stake of 25 percent plus one share in diamond miner Alrosa, shipping company Sovcomflot and Aeroflot airline and 50 percent plus one share in Rosneft, RusHydro and VTB, Ulyukayev said.

The Russian government currently holds a 51.2 percent stake in Aeroflot, 50.9 percent in Alrosa, 100 percent in Sovcomflot, 60.9 percent of VTB, 69.5 percent of Rosneft and 66 percent in RusHydro.

The three-year privatization plan is expected to yield 1 trillion rubles ($31 billion) rubles for the state’s coffers, Ulyukayev said.

“About one trillion 20 billion rubles will be paid into the federal budget [from privatization],” Ulyukayev said.

Part of this money will be spent on the development of companies and increases in their charter capital, he said.

Prime Minister Dmitry Medvedev, who chaired the government meeting, urged the government to implement the privatization plan in full.

Delays in privatizations in previous years could be put down to market trends, but was also down to lobbying by some officials “who would do their utmost to prevent the sale of some assets,” Medvedev said.

“We no longer have a socialist and planned economy and I agree with those who say that privatization pursues not only fiscal goals, but first of all is a guideline of how our economy will develop,” Medvedev said.