Creeping privatization does not solve the problems the government faces

Shares of five JSCs have been sold at open auctions for a total of USD 4 million. The list of enterprises-to-be-privatized via open auctions lacks profitable and large companies, which proves that the government fails to implement a consistent open privatization policy or to stabilize the currency market.

Shares of five Joint-Stock Companies have been sold at an auction on 11 October for a total of Br 37.241 billion. Namely, shares in JSC “Vitebskles” (99.1% of the authorized capital) were sold for over Br 15 billion (50% increase of the initial price) to JSC “Pinskdrev”. State-owned shares of a Minsk-based JSC “Energoeffect” (98.9% of the authorized capital) have been acquired by a company “Agricultural technology” (Pinsk) for Br 4.746 billion, exceeding the starting price by 5%. 87.4% of the authorized capital of the JSC “Belkotloochistka” (Minsk) has been sold for Br 4.2 billion (5% increase of the initial price). 97.9% of the authorized capital of a Gomel-based JSC “Elegant” has been sold for Br 10.395 billion and 79.9% of a Vitebsk-based JSC “Wicca” has been sold for Br 2.9 billion to an Ltd “UnivestSistem” (Brest) and Inc “Rosvest” (Russia), respectively.

Shares of five Joint-Stock Companies have been sold at an auction on 11 October for a total of Br 37.241 billion.

12 other companies put up for an auction found no buyers. Before the end of 2011 60 other state-owned companies will be put up for auctions. Some of the shares, put up on sale yet in June and July will be advertized for a second time and, possibly, at a reduced price (by 20% to 50%).

Comment

Within the scope of its authority the Government tries to continue with privatization and puts enterprises for public auctions. However, companies, put on sale are small and not always profitable, hence, the lack of interest and low volume of sales. There are no commercial banks or strategic enterprises in the lists of assets to be put up for an auction. Their privatization is negotiated behind the scenes. Therefore the ongoing sales in the country are not sufficient to demonstrate a consistent privatization policy (to external partners), or to stabilize the currency market (to domestic partners).