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. Last Updated: 07/27/2016

2 Unknown Firms Win Stakes In Kemerovo Coal Companies

Two previously unknown Russian companies have won a state auction for blocking stakes in a pair of large Kemerovo coal firms for just a notch over the starting prices.

The state called for Friday's privatization to fulfill a World Bank requirement for the release of its next $200 million installation of a $800 million loan to restructure Russia's coal industry.

A 26.37 percent stake in Kuzbassrazrezugol holding company, offered for a starting price of 187 million rubles ($8.9 million), was bought for 189 million rubles and a 26.02 percent stake in Yuzhny Kuzbass, a smaller company, was offered for 62.58 million rubles and went for 62.68 million rubles, said the Russian Federal Property Fund, which oversees privatization auctions. Russian law considers shares of more than 25 percent to be a blocking stake.

The stakes were bought, respectively, by SFEN and Uglemetkooperatsiya, which analysts said were probably fronts for a large company with interests in the region. Company officials were unavailable for comment Monday.

Although Friday's Kuzbassrazrezugol sell-off brought in only a fraction of the $40 million earned for a 28 percent stake in the company last year, the Federal Property Fund defended the amount, saying it was fair considering the financial crisis. Kuzbassrazrezugol is Russia's largest coal company.

"Given the situation on the stock market at the moment and the fact that many state property sell-offs this year had to be canceled or postponed, the outcome is very positive," spokesman Oleg Shevchenko said Monday.

One World Bank official also said the results of the auction could be considered positive "given the financial situation."

The World Bank had warned that leaving blocking stakes in state hands could deter the restructuring of the companies and prevent the bank from disbursing loans.