MinFin backs initiative to satisfy all demand from pension funds during privatization
MOSCOW. April 19 (Interfax) - The Russian Finance Ministry backs an initiative to satisfy all demand by non-state pension funds when major companies are privatized, Deputy Finance Minister Alexei Moiseyev told reporters.
"We'd like non-state pension funds to be key buyers of the assets we are privatizing," he said.
"I think this [granting all demand by these funds] is the most straightforward and correct thing that we can do. Ultimately it will be the Russian Federal Property Agency (Rosimuschestvo) that decides how bids are satisfied, but we back the 100% allocation of blue chips to non-state pension funds," he said.
Deputy Economic Development Minister Nikolai Podguzov has said bids from pension funds, unlike other categories of investor, might be satisfied in full during privatization.
"For example we have demand for 100 rubles and shares are sold for 50 rubles. You could halve each request, possibly targeting a certain base of investors, and satisfy some in full. I think this is quite possible [to satisfy bids from non-state pensions funds in full]," Podguzov has said.
"Remember, there was great theory about giving our national heritage to our pensioners, that is privatizing all that is good by distributing it to the non-state pensions funds? That was a fine idea but one that couldn't be put into practice, but even so its beauty can be reflected without the problems that were associated with it by 100% allocation via non-state pensions funds," the Finance Ministry's Moiseyev said.
He said that if a decision is reached to privatize an 11% stake in diamond miner Alrosa , then this would be done via the sale of ordinary shares on the Moscow Exchange . The Finance Ministry expects to get a good price - not lower or maybe even higher than of it were to place shares elsewhere or sell them to a strategic investor.
"Many companies are dropping their listing in London and moving it to Russia. I think fewer and fewer of them will be maintaining at least two listings as this is fairly expensive. We see that the Moscow Exchange will become the main venue for funds to be invested not just in the bond market but also in the stock market," he said.