Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Svyazinvest Tops List of Privatizations for 2003

The government hopes to raise 51 billion rubles ($1.62 billion) in 2003 through the sale of state-owned assets, the bulk of it from a minority stake in state telecoms holding Svyazinvest, the government said Friday.

The government said in a statement it planned to sell 25 percent minus two shares in the company, a stake expected to generate some 70 percent of planned privatization receipts next year. That puts Svyazinvest's stake at around 35 billion rubles.

International financier George Soros led a coalition that bought 25 percent plus one share in the holding in a 1997 auction with a bid of $1.875 billion. Soros later called it the worst investment he had ever made.

Svyazinvest owns a controlling stake in Rostelecom, the national fixed-line carrier.

Russia is in the process of consolidating dozens of regional fixed-line carriers, and authorities hope that a sweeping restructure will raise the price of Svyazinvest's stake, which has been slated for privatization for years.

"Companies that have strong potential for competition must be privatized," Prime Minister Mikhail Kasyanov said in remarks shown on television after the Cabinet discussed the 2003 privatization program at an extraordinary meeting.

But Kasyanov said that while individual enterprises should be transferred to private owners, "the country's infrastructure should not be privatized."

The plan also calls for a sale of 17 percent in top three steel maker Magnitogorsk and 5.27 percent in oil company Slavneft.

Russia holds a 75 percent stake in Slavneft and intends to sell 19.68 percent of it this year. Belarus owns 11 percent in the company, with the rest in private investors' hands

The government said the privatization revenues would be used to reduce the country's long-term liabilities. Russia has to repay foreign debt worth some $17 billion in 2003.

Privatization remains one of the most controversial issues in Russia.

There are still 9,810 state-owned enterprises in Russia, and the government owns a stake in another 4,354, according to a report by First Deputy Property Minister Alexander Braverman, Itar-Tass said. These include oil companies, telecommunications businesses and airlines.

In total, the government hopes to privatize 450 state-owned companies, and sell its stakes in 600 others next year, Itar-Tass reported.

Kasyanov also said that the government was considering foreign loans to energy firms in China, India, Vietnam and Yugoslavia. The loans, Kasyanov was quoted as saying by Interfax, are "a mechanism of export support."

(AP, Reuters)