Government shares, or whatever still remains, in 18 companies will soon be offered on the stock market, an official with Iran Privatization Organization said on Wednesday.
Jafar Sobhani, an advisor to IPO, said the divestiture includes six refineries and one petrochemical company, IRNA reported.
The move follows an earlier decision by the government’s Economic Commission earlier in the month, which stipulates that the remaining government-owned shares in the companies must be sold in its entirety to the private sector.
The divestiture will be handled by IPO and is in line with Article 44 of the Constitution that offers opportunities to private enterprise, promotes downsizing and curbs the bloated bureaucracy.
According to existing privatization laws and as per Article 44 of the Constitution, state-owned enterprises fall into three main groups.
The government is barred from ownership, investment and managerial posts in Group I. Likewise, the government is obliged to transfer 80% of the total firms in Group II to private, cooperative, public and nongovernmental organizations. Ownership, investment and managerial positions in Group III is exclusive to the government.
Of the 18 entities in the latest divestiture list, three fall into Group I, whose shares the government is obliged to sell to the private sector.
The remaining 15 companies, including refineries and petrochemical companies, are in Group II.
“Although the government could still keep its 20% share in refineries and petrochemical companies, it decided otherwise in line with its policy to downsize and allow more space and voice for private enterprise,” the official added.
The assets on sale include a 20% stake in state-owned oil refineries in Tehran, Tabriz, Bandar Abbas, Shiraz, and Lavan, 9.9% stake in Esfahan Oil Refining Company, and a 19% stake in Persian Gulf Petrochemical Industries Company.
As for pricing issues, Sobhani said as the companies are already listed on the stock market, the same pricing procedure in the stock market will apply.
“The price of a particular share on the market bulletin a day prior to the divesture date will be the base price”, he said, adding that the shares will be sold within a smooth and gradual process so as not to shock the market.
