Russian ex-fin min calls to delay oil firms, banks privatization

DAVOS, Switzerland, Jan 22 (PRIME) -- The Russian government should delay privatization of oil companies and banks for 12–18 months and use the Reserve Fund’s money during this period of time, former Finance Minister Alexei Kudrin told PRIME on Friday.

“If to speak about oil companies, I would delay (privatization) for one year or one year and a half. Because in the peak of prices reduction and with the GDP (gross domestic product) continued decline the value of such companies is very low,” Kudrin said.

“I think it would be more reasonable to use the Reserve Fund’s money and receive much more for these assets in a year and a half,” he said.

“The same refers to banks. There is such a peak of crisis that the cost of banking capital is very low,” Kudrin said.

Kudrin believes the government will be cautious in using money from the Reserve Fund and the National Wealth Fund and will unlikely fully spend them by 2018.

Finance Minister Anton Siluanov said earlier in January that the government was considering selling a 19.5% stake in oil major Rosneft as a way to replenish budget income.

Kudrin also said he believed that several Russian companies and banks will require government support in 2016. He also said a number of bankruptcies will continue this and next year.

“Companies’ internal resources are sometimes limited, a demand for production is falling, they (firms) suffer losses which someone should cover, they have debts remaining, which they can’t return,” Kudrin said.

The government is delaying structural reforms due to forthcoming elections, Kudrin also said.

“I think that elections are the main reason why they (reforms) are being delayed. Secondly, they are not much developed so far, even instructions to prepare them have not been given,” he said.

Kudrin also advised Russian population to buy OFZ government bonds, as it is a reliable instrument.

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