Russian Oligarchs Most Likely Buyers in Putin's New Privatisation Plan

Reuters

MOSCOW, Feb 2 (Reuters) - Russian oligarchs are the most likely potential buyers of the stakes in some of the country's largest companies that President Vladimir Putin wants to sell.

The Kremlin said on Tuesday foreign investors were welcome to participate in the privatisation announced the day before, which has been driven by an economic crisis brought on by low oil prices.

But former officials, bankers and analysts said the perceived risks of a country subject to western sanctions over Ukraine and with a history of disputed property rights, would limit foreign participation.

Two senior government officials said the plan may only raise between 50 and 80 percent of the trillion roubles envisaged.

Russian's well-connected magnates may have to be cajoled into investing at a critical juncture for the economy, but could in the long term end up with valuable assets at bargain prices, leaving the Kremlin open to accusations of sweetheart deals.

The preliminary privatisation plan, aimed at preventing the state budget deficit from ballooning, coincides with a second year of recession for Russia where share prices have slid along with the price of crude..

Sources told Reuters the Kremlin is considering reducing state stakes in oil companies Rosneft and Bashneft , shipping firm Sovkomflot, diamond miner Alrosa and state-controlled bank VTB.


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