7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Iran privatises $63bn equity

TEHRAN: Iran said yesterday that it has privatised $63 billion worth of government equity in state-owned firms, meeting half of the target currently set as part of its privatisation drive.

Gholam Reza Heydari Kord Zanganeh, head of the state-run Privatisation Organisation, said the divestment cut the government's part of the gross domestic produce to around 45 per cent from 60pc before the programme.

"We have privatised $63bn worth of government assets since 2005," when the privatisation programme was launched, Kord Zanganeh said.

He said when the plan kicked off, the targeted government assets were worth $120bn.

"I believe we have executed 50pc of the plan," Kord Zanganeh said, adding "the government's part in economy which was 60pc before is now 40 to 45pc."

In 2006, supreme leader Ayatollah Ali Khamenei urged the government to push ahead with the stuttering privatisation drive which envisages selling 80pc of state-owned companies, mainly in the banking, media, transport and mineral sectors.

In most stake sales, the government hands out 20pc of the equity in targeted companies as "justice" shares to the poor and retains 20pc.

Of the remaining 10pc, 5pc is given to employees of the company and the rest is offered publicly to set a price prior to the majority stake sale.

Economists have criticised President Mahmoud Ahmadinejad's government for dragging its feet over privatisation as several non-governmental retirement funds.

Economists have criticised the sell-off process, saying the stakes sold in most such equity divestments do not end up with the real private sector.

The feasibility of the plan was further questioned when in late September a majority stake in Iran's only state-owned telecommunications company was sold to a private consortium in an $8bn deal.

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