Russian Owners, Part VI

Russian Crooks Department

Who is getting rich on “people’s IPO”
From: alex_leshy, February 26th, 14:05


(Click to enlarge) The Minister of Finance of the Russian Federation Anton Siluanov and Minister of economic development of Russia Alexei Ulyukayev (left to right).

Privatization of state assets brings money to the right people

Rarely agree with each other, the Minister of Finance Anton Siluanov and his colleague from the MAYOR Alexei Ulyukayev unanimously insist on the necessity of privatization. And even though the Ministry of Finance recognize that the proceeds from the sale of state assets would cover barely a fifth of the budget deficit, and then only for two years, this and many other awkward questions, Ministers have tried to bury solemnly promises that, well, this time everything will be fair, transparent and with a lot of preferences for ordinary citizens. In General, privatization will be the most popular of all folk.

However, as the experience of the previously conducted “people’s IPO” to citizens there is nothing to rejoice.

Bright shiny thing people’s IPO

The First “people’s IPO” took place in Russia ten years ago. In an attempt to attract to the stock exchange the maximum number of the population of companies began to sell their shares in Russia and not abroad (as it were), and at such a low price to buy them can practically everyone.

Tried a new mechanism of raising capital for Rosneft. In its “people’s IPO” was attended by 115 thousand individuals who became the owners just over 1% shares of the oil giant. Together people invested in the company $ 750 million. Price of one share amounted to 7.55 USD or 225 rubles.

The undoubted success of the pioneer prompted to enter the path of “people’s IPO” and other players. In may 2007, at the time a fully state-owned VTB has undertaken a similar placement of 22.5% of its share capital. The shares were set at a very affordable price 0.136 ruble apiece (no error, of 13.6 kopecks), and saw the USD 8.24 billion. The contribution of private investors (of which there were about 135 thousand people, including 119 thousand individuals) amounted to 1.6 billion dollars.

In 2007 its “people’s IPO” 8.8 billion dollars spent and the savings Bank. However, it was not the primary and certainly not the people’s occupancy: the price of 89 thousand rubles per paper was almost prohibitive for a significant portion of the population. As a result, only about 30 thousand individuals became new shareholders of the Bank.

Although VTB and Sberbank failed to break the record of “Rosneft“, their experience showed that “people’s IPO” is a very easy and relatively quick money. Almost every Russian “blue chip” dreamed about a similar location, but the crisis of 2007-2008 forced to postpone these plans for more appropriate times. And, I must say, it has saved the savings of the population from further looting.

(…)
(K: read all, it’s short text)

***

However, judging by the rhetoric of government officials, in one window will not answer the most important questions: why does the government sell to private hands hens that lays the Golden eggs? Than will cover the budget deficit, when it’s sold out? And what country has established two reserve Fund? Apparently, this is not our “people’s” business…

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s