Government still plans to cut stake in VTB, ALROSA in 2017–2019

MOSCOW, Feb 15 (PRIME) -- The government on Wednesday published its 2017–2019 privatization plan that includes cutting state ownership in leading companies, like Russia’s second largest bank VTB, uncut diamond mining giant ALROSA, and shipping company Sovcomflot.

The government plans to cut its stake in ALROSA to 29% plus one share, in Sovcomflot to 25% plus one share, and in VTB to 25% plus one share. Reduction of state ownership in VTB to below 50% plus one share should be done simultaneously with the cut of central bank’s stake in top bank Sberbank, according to the document.

Currently, the governed owns 33% in ALROSA, the republic of Yakutia has 25% plus one share, municipalities of the republic hold 8% and 34% is free-float. A source told PRIME on February 2 that the cut of stake in the company will be done with coordination of a sale of shares owned by the republic and its municipalities. The government also owns 100% in Sovcomflot and 60.93% in VTB.

In total, the plan envisages sales of stakes in 477 joint stock companies, 298 federal unitary enterprises, 10 limited liability companies, and more than 1,000 assets of other types. Budget should receive 5.6 billion rubles from privatization per year, excluding revenues from sales in leading companies, the plan read.

The privatization plan also includes the sale of 100% in the Far Eastern Energy Management Company, or DVEUK. Previously, Deputy Energy Minister Vyacheslav Kravchenko said that DVEUK is a holder of grid assets, but initially the company was to construct and transfer assets to other facilities. The government may acknowledge DVEUK as a grid company and transfer it to state holding Russian Grids completely or transfer only grid assets of the company to the holding, he said then.

But the list of privatization does not include plans to cut Russian Grids’ stakes in six out of eight large regional affiliates – in Volga, Siberia, Center and Volga, Center, South, and Urals interregional distribution grid companies (IDGC) – to 25% plus one share. The government only plans to sell small stakes of 0.06–3.71% in the companies and a couple of other distribution firms.

The most noticeable stakes in grid companies that the government plans to privatize are 13% in Kabbalkenergo of the republic of Kabardino-Balkaria and 7.36% in Kubanenergo of the Krasnodar Region.

The government also included sales of 25.5% in four river ports – in the cities of Cheboksary, Novosibirsk, Omsk and Komsomolsk-on-Amur in the period.

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