Russia’s Ulyukayev Eyes Privatization as Economic Option

Russian Economic Development Minister Alexei Ulyukayev this week received expressions of interest from major banks regarding a plan to privatize portions of Russian state-owned business assets. Mr. Ulyukayev had asked for proposals regarding the move from the global financial sector earlier this month.


Evgeny / Pixabay

The  currently planned round of privatization involves three Russian state-owned businesses. The companies in question are oil and petrochemical firm Bashneft, of which a 50.08 percent share is expected to be sold into private hands, diamond mining firm Alrosa and financial service provider VTB. The latter two companies will see smaller shares sold off, with only 10.9 percent of each expected to be sold into the open market.


In order to facilitate the selloffs, Ulyukayev had solicited proposals from banks that would be interested in serving in advisory capacities to the Russian government. Thus far, sources have reported that three major European banks have expressed interest in taking a role in the privatization of the Russian assets. Switzerland-based banks Credit Suisse and UBS, as well as Italian banking firm UniCredit, have plans to engage in the selloffs, so long as doing so does not violate existing sanctions against Russia’s financial sector. The Economic Development Ministry has also requested proposals from larger western banks, including Barclays, Deutsche Bank, Goldman Sachs, JP Morgan and the Royal Bank of Scotland. Thus far, no reports indicate that these banks have expressed interest or submitted independent proposals to Moscow.


The broader topic of privatization also formed part of the discussion at an economic meeting between Ulyukayev and John Tefft, America’s current ambassador to Russia, on Monday. “We have discussed a broad spectrum of the Russian-American economic ties, including both commercial and financial relations. The meeting was largely for information purposes. I have given my explanations on a large number of the issues sparking interest of our American counterparts, starting from the prospects of Russia’s economic development, the opportunities for U.S. firms with regard to participating in the privatization, and basic parameters of the latter. I think we had a businesslike, constructive talk and made a reasonable contribution to the shooting of those problems that are probably obstructing our relations from being developed in an optimal, energetic way,” said Ulyukayev of the contents  of the meeting. The issue of United States economic sanctions against Russia was also raised within the context of the possibility of major US banks participating in privatization efforts during the discussion.



Share with your friends

Follow Us

Enter your email address to get updated when we have new posts on the site and never miss a thing:

Delivered by FeedBurner

Leave a Reply

Your email address will not be published. Required fields are marked *