Too early to begin RZD privatization in 2017, discussions to take place next year - Belozerov
MOSCOW. Dec 19 (Interfax) - The year 2017 is too early to launch the process of privatizing Russian Railways (RZD) and only discussions of this issue are expected next year, RZD CEO Oleg Belozerov said.
Ideally, the RZD privatization should bring in a portfolio investor, he said.
Currently the state owns 100% of RZD. As reported earlier, Russia's Economic Development Ministry included 25% minus one share in RZD in its privatization plan for 2017-2019. However, the ministry has not revealed more specific plans regarding RZD's privatization. Federal Antimonopoly Service Chief Igor Artemyev said that from the point of view of increasing the level of transparency, it would be sensible to sell 5%-10% of RZD's shares.
"The year 2017 will be a year of discussion, how to approach privatization, not all of the preconditions that we discussed initially have been created yet. For that reason, I don't think it would be advisable to carry out privatization in 2017," Belozerov told journalists.
"First it must be clear when the preconditions will be created. This is the catalog price among other things, such as the conditions concerning mechanisms for investment on the part of the state," he said.
In the final analysis, the buyer must be a portfolio investor. However, so far there is no complete certainty on that score, Belozerov said.
"We are okay for now even without investors," he said.
"We want to try the perpetual bond format. Perhaps look at preferred shares. That which does not stipulate a shift in management, but that increases the company's internal financial abilities," Belozerov said.
