The government is revisiting its large-scale divestment schemes that were initially to be implemented via exchange-traded funds.
It had earlier said that it would sell stakes in four refineries via ETFs. However, ISNA quoted an official at the Iranian Privatization Organization as saying Sunday that only two refineries, namely Tehran Oil Refining Company and Esfahan Oil Refining Company will be put up for sale via the ETFs.
The government reportedly wants to offer its shares in Tabriz Oil Refining Company and Bandar Abbas Oil Refining Company in blocks, according to Abolqasem Shamsi.
A notice posted on the IPO website outlines details about the Tabriz refinery shares to be offered as a block.
As per the notice, the offer includes 1.64 billion shares representing 16.4% of its total shares.
The whole block has a 48.46 trillion rials ($220 million) tag and the prospective buyer(s) should pay half the price in cash and the remaining in installments in 18 months.
Economists, pundits and market observers say the government’s divestment schemes have been the main trigger of the surprising stock market growth in recent months. It remains to be seen why the government has now decided to change its approach to the divestiture process
It merits mention that the government has tried but failed to sell its shares in the companies, particularly in refineries and insurance firms in blocks.
The setback, apparently, was due to fact that buyers could not afford a block of shares worth millions of dollars.
Economists, pundits and market observers say the government’s divestment schemes have been the main trigger of the surprising stock market growth in recent months. It remains to be seen why the government has now decided to change its approach to the divestiture process.
Tehran’s share market has grown substantially since late March when the government announced plans to cede shares via the bourse. Officials in the government including President Hassan Rouhani have voiced unusually strong support for the share market and encouraged the people and investors to join.
Shares of companies in which the government has stakes have grown up tenfold in a little more than three months. Due to their big market caps, price surge in the shares have caused the market-cap weighted benchmark of Tehran Stock Exchange to rise incessantly.
3-Phase Plan
In April the government said it would cede shares in three phases through three ETFs. The first phase commenced on May 3 with 17% of government stake in Tejarat Bank, 17% in Bank Mellat, 18.32% in Bank Saderat Iran, 17.34% in Alborz Insurance Company and 11.44% in Amin Reinsurance Company on offer via an ETF dubbed the ‘First Financial Intermediary’.
Shares in refinery companies will be offered as part of the second phase in another ETF in the coming days.
Finally in the third phase shares in giant auto and metal companies will be on offer. The third fund is expected to hold 12.05% of government stakes in the National Iranian Copper Industry Company, 17.2% in Mobarakeh Steel Company, 14.04% in Iran Khodro (IKCO) and 23% in SAIPA.
