Russia says state asset sales open to investors
Foreign investors will be able to buy stakes in Russian state companies, the Kremlin said, though President Vladimir Putin's made no final decision on the extent of a privatization program. "Russia was and remains open for foreign investment and Russia is interested in attracting new foreign partners," Kremlin spokesman Dmitry Peskov told reporters on a conference call Tuesday, a day after Putin said that only Russian-based investors could buy stakes in state companies.
The president told the government to conduct further work on the asset-sale plans and his demand for Russian jurisdiction is intended to fight offshore ownership schemes, Peskov said. "If the question is about a foreign investor, that's one thing. If it's about a Russian investor, it must not be another offshore scheme," he said.
Putin ordered that "new owners of privatized assets must have Russian jurisdiction" during a Kremlin meeting with his economic advisers and the heads of state companies including Rosneft OJSC, VTB Bank PJSC, Aeroflot PJSC, Alrosa PAO, Bashneft PAO and Russian Railways JSC. The Finance Ministry has announced plans to offer stakes in state-owned companies over two years to earn about 1 trillion rubles ($13 billion) as it seeks to cover a second year of budget deficits after the collapse of oil prices tipped Russia into its first recession since 2009.
The budget deficit, already at a five-year high in 2015, risks swelling to as much as 6 percent of gross domestic product this year unless the government takes measures that may include a 10 percent cut in spending, Finance Minister Anton Siluanov said Jan. 13.
The budget's in a "critical" situation, while the general financial turbulence means there's no point waiting for markets to rebound to allow asset sales in more favorable conditions, Economy Minister Alexei Ulyukayev said at a meeting of the ministry's council on Tuesday. The government's task is to carry out quality, transparent deals "in this extremely unfavorable market," he said. The government is considering broadening the list of big entities to be privatized in 2016, Ulyukayev's deputy Olga Dergunova also said on Tuesday.