PRIVATIZATION PLANS MAY GROW
By Kim Iskyan
Putin ally Valentina Matviyenko became the speaker of the Federation Council in Russia’s national parliament.
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Oil producer Rosneft may be fully privatized |
Governor of St. Petersburg and longtime Putin ally Valentina Matviyenko resigned to become the speaker of the Federation Council, the upper house of Russia’s national parliament.
Her likely successor, Georgy Poltavchenko, is a former KGB officer and also a strong Putin supporter.
North Korean leader Kim Jong-il traveled through Russia by train—his first visit since 2002. On the agenda during meetings with Russian president Dmitry Medvedev are discussions about North Korea’s desire to carve out a role in transporting Russian energy to South Korea and Japan.
Andrei Borodin, the former head of the Bank of Moscow—which received a $14 billion government bailout in July—has claimed that the emergency funding was an unnecessary waste of money. Bank of Moscow is being taken over by state bank VTB this year for a total purchase price of $9.2 billion. Borodin, who sold his stake in the bank in March and is now in exile, is also casting doubt over the terms of the controversial acquisition by VTB.
In early August, Medvedev proposed a significantly expanded Russian privatization plan, which would aim to raise as much as $200 billion by 2017. Controversially, the plan called for the Kremlin’s full stakes in oil producer Rosneft and state bank VTB to be sold off, along with a stake in pipeline monopoly Transneft. The state already sold a 10% stake in VTB in February for $3.3 billion.
But the government appears split on its support of the program, which will also face substantial resistance from the managements of many of the companies that would be sold.
In the latest chapter of the struggle over control of Russian metals giant Norilsk Nickel, the company’s management offered to buy most of the shares held by two of the company’s large, feuding shareholders, Oleg Deripaska and Vladimir Potanin. But neither party accepted the offer, further prolonging uncertainty over the company’s fate.
