The Russian
government has announced the criteria for purchasing private shares of
state-owned oil company Rosneft, the Vedomosti business daily reported Friday.
The government is
selling 19.5 percent of Rosneft's total shares, and hopes to make at least
700 billion rubles ($11 billion). This is part of
Russia's largest privatization scheme since the 1990s, with the
Russian government reluctantly selling assets during a deep economic recession.
Purchasers of
Rosneft's private stake will be subject to several requirements.
First, any share package purchased must be held for at least three years,
to prevent short-term investing.
Second, investors
will be required to sign a shareholder's agreement that obliges them
to vote in favor of any government member who applies for a seat on
Rosneft's board of directors.
Third, an investor
is required to be free of debt and with a clean record of corruption. If potential investors hold debt, they must present a plan for debt consolidation.
A preliminary list
of candidates for purchase of the shares must be submitted to the
government by Sept. 1. The successful privatization of oil assets
is not guaranteed, and if the price of crude oil climbs, analysts say
prospects of sale are dim.
The first sale of
Russia's new privatization campaign was concluded this week when a
10.9 percent stake in the world's largest diamond miner, Alrosa, was sold
for 52.2 billion rubles ($816 million). The shares went for 65 rubles
($1.01) each.
Under President Vladimir
Putin, the Russian government's stake in the economy has increased
dramatically, to as high as 55 percent in 2015. When asked why the state is looking to sell assets, Putin replied: “We need the
money.”
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