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. Last Updated: 07/27/2016

Estonia Announces First Public Offer

TALLINN, Estonia -- The Baltic republic of Estonia announced Tuesday the first public share offer in its post-Soviet history, putting up for sale a 49-percent stake in a department store in its capital Tallinn.


The Privatization Agency said the state would float its 49-percent stake in Tallinna Kaubamaja AS, 51 percent of whose shares were bought in September by Estonian investment consortium E-Investeeringugrupi AS for the equivalent of $5 million.


The agency will offer 1,663,100 shares for vouchers at a fixed price of 36 Estonian kroons ($3) each. The shares have a face value of 10 kroons.


The shares will be sold through privatization accounts which Estonian residents will be allowed to open at designated banks. The agency will start receiving orders from Nov. 21.


Vaino Sarnet, director general of the Privatization Agency, told reporters the share offer was yet another move in Estonia's march towards an open economy and free competition.


The government wanted to expand share ownership in the tiny republic through sales of stakes in enterprises, he said.


Liia Hanni, minister for reform and chairman of the Privatization Agency, told a news conference late Monday that 30,000 investors had opened privatization voucher accounts.


So far the use of vouchers in Estonia, a showcase for economic reforms in the former Soviet bloc, has been limited to housing privatization.


The Tallinn department store made net profits of 6.6 million kroons ($600,000 million) in the first half of 1994. It expects a turnover of 340 million kroons this year, up slightly over 1993, the Privatization Agency said.


By the end of 1993 more than 80 percent of enterprises in the food and services sector and 54 percent of retail outlets were in private hands. A number of larger enterprises have been offered through international tenders in a system modelled on the one used by Germany to sell off former East Germany's industry.