Belarus puts more ‘family silver’ up for sale in 2014

It looks like the Belarusian authorities are becoming serious about re-starting their state property privatisation programme, announced in October. On Friday, the government revealed that it has offered a stake in Mozyr refinery, one of the country’s most profitable enterprises, to Russia’s oil giant Rosneft. A few days earlier, the government said it has plans to sell a stake in state-controlled MZKT, known globally as a producer of military vehicles as well as chassis for Russian strategic missiles.

In October, the Belarusian State Property Committee (SPC) published a list of state-run enterprises which would be offered to potential investors. A number of enterprises which could be considered as part of the “family silver” are included in the list. The most significant are a 42.76 per cent stake in Mozyr and MNPZ Plus, a state-run company that controls a 12.25% stake in the refinery.

At the moment, Rosneft and Gazpromneft, the oil arm of Russian state gas giant Gazprom, already have a 42.58 per cent stake in Mozyr.

Piotr Prokopovich, deputy prime minister of Belarus, said on Friday when addressing parliament, that the government has transferred its offer to Rosneft. “We have transferred the proposal to Rosneft, on the condition that the annual volume of oil processing is raised to 20 million tonnes by 2020,’ he said. Mozyr’s current annual capacity is 11m tonnes.

Igor Sechin, Rosneft’s chief executive and one of the most powerful men in Russian business, reacted quickly. “We received an offer from the Belarusian side to participate in their privatisation programme… We will examine this issue. Overall, we are positive about increasing our work with Belarus,” he told reporters on Friday.

Prokopovich also added that the government hopes to sell its 51 per cent stake in MTS, the Belarusian mobile phone network, a joint venture with the Russian group of the same name. It hopes to do this in the first quarter of 2014. SPC announced a new tender for the company this month after several failed attempts in previous years, cutting the stake’s price from $1bn to $863m.

And that is not all the news about privatisation plans in Belarus. Last week, the government announced that an agreement had been reached to sell to an unnamed Russian investor a stake in Minsk-based MZKT, known internationally under the brand VOLAT.

According to a statement published by the government’s media office, the stake will be sold after an additional issue of the company’s stock. “The funding will be used to retool and modernise the enterprise… The project has been scheduled for implementation in 2014,” the government underlined.

Despite the Belarusian authorities avoidance of naming the investor, Reuters reports that the government had previously reached an agreement to sell a stake in MZKT to the Russian truck producer KAMAZ, 11 per cent of which is controlled by Daimler and 4 per cent by the European Bank for Reconstruction and Development.

However, it seems that it will not be so easy for the government to secure a deal for the privatisation of MZKT, as the Belarusian president Alexander Lukashenko has previously criticised any possible privatisation of the enterprise.

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