November 14, 2012 09:39
Sovereign funds shouldn't be main investors in RZD privatization - Shuvalov
MOSCOW. Nov 14 (Interfax) - Sovereign wealth funds should not be the main investors in the privatization of state assets, First Deputy Prime Minister Igor Shuvalov believes.
Last week, Deputy Transport Minister Alexei Tsydenov said that a 5% stake in Russian Railways (RZD) (RTS: RZHD), the privatization of which in 2013 was recently discussed at a cabinet meeting, could be bought by state-owned Vnesheconombank (VEB) or one of Russia's wealth funds.
Commenting on this proposal, Shuvalov said that "the issue needs to be decided [depending] on the stake that will be offered."
"In general, whether wealth funds can buy stakes in privatization - discussions are underway on this issue. I already expressed my position during the St. Petersburg Forum. But you can't say it like this: to have [the funds] buy the 5% [of RZD]. This is only in the case where you see the whole deal, you have a quality investor, you are achieving good results, and in this case, if it is a good privatization, the wealth funds decide to invest because this is good for future generations. Not the other way around, so that it looks like a good privatization only because the wealth funds are buying shares in the company being privatized," Shuvalov told reporters on Tuesday on the sidelines of a Bankers' Day organized by Itogi magazine.
"This process should be managed by professional financiers and specialists. A decision can be made when they see that this is an excellent investment for future generations and the value of the asset will grow in price," Shuvalov said.
At the St. Petersburg International Economic Forum in June, Shuvalov said he believes it is possible to invest a tenth of the resources of the National Wealth Fund in state companies that are being privatized. This idea was supported by a number of investment banks among those advising Russia on privatization, but received a cold reception at the Finance Ministry, which will oversee the future Russian Finance Agency that will manage the NWF and Reserve Fund.
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