The Iranian Mines and Mining Industries Development and Renovation Organization, will be listed on the Tehran Stock Exchange by the end of the month, head of the Iranian Privatization Organization said.
Speaking on state radio, Alireza Saleh said, the organization has received approval from the Industry Ministry and is waiting for the final okay from the Cabinet for the initial public offering.
A major state-owned holding company active in the mining sector, IMIDRO has eight major companies and 55 subsidiaries involved in the steel, aluminum, copper, cement and mineral sectors, IRNA reported.
Listing of giant public and government holdings is rapidly gaining momentum in line with the government’s declared privatization policy and its concerted efforts to downsize and reduce its economic footprint.
On Wednesday, the Social Security Investment Company (known as Shasta), Iran’s largest holding company, went public selling 10% of its shares worth 68.8 trillion rials ($430 million).
“There are other state-run companies that want to list in the capital market,” Saleh said.
On the merits of listing, he pointed to improvement in transparency of government-controlled companies as listed companies have an obligation to present financial data to the public on a regular basis.
In addition, companies wanting to go public should be able to meet the professional qualifications required by the stock market regulator.
Saleh stressed the need to sell shares of parent holding companies and avoid listing subsidiaries separately, arguing that in the latter case the value chain and management of the parent company would be undermined.
In past procedures, when a subsidiary of a large holding was divested, the parent company would encounter problems, especially related to management.
Three ETFs
Referring to plans to divest the residue stakes of the government in 18 companies, the IPO chief noted that the shares will be offered via three main exchange-traded funds.
The first ETF will comprise government shares in three major banks, namely Bank Mellat, Tejarat Bank and Bank Saderat Iran.
The other ETF will include government shares in big oil refineries in Tabriz, Isfahan and Bandar Abbas.
The last will deal with divestiture of government shares in Iran Khodro (IKCO) and SAIPA (two main auto companies) and giant state=owned steel and copper companies.
Government assets on sale in 18 companies will include 20% stake in state-owned oil refineries in Tehran, Tabriz, Bandar Abbas and Isfahan. Seventeen percent each in Tejarat Bank and Bank Mellat, 18.3% in Bank Saderat and 11.44% in Amin Reinsurance Company.
The list goes on to include 18.96% in Persian Gulf Petrochemical Industries Company, 12.05% in the National Iranian Copper Industry Company, 17.2% in Mobarakeh Steel Company,14.04% in IKCO, 23% in SAIPA, 40% in Pars National Agro-Industry and Animal Husbandry Company, and 13.02% in the National Investment Company of Iran.
Officials say offering shares via ETFs has advantages both for the government and buyers as it helps the former raise funds by ceding assets to the public, and provides investment opportunity for relatively large sections of the people with limited funds.
As per rules, people with small savings can buy ETF units using their national ID numbers as trading codes.
The scheme is enshrined in the March 2020-21 fiscal budget. Companies and organizations have been ordered to name subsidiaries in which government shares are below 50%.
They are required to also send the latest by June names of companies, which can be listed on the bourse, to the Ministry of Economy and the Plan and Budget Organization.
