The government will relinquish its remaining shares in the Persian Gulf Petrochemical Industries Company (PGPIC), head of the Iranian Privatization Organization said.
“The IPO plans to hold an auction to sell 18% of its stake in this petrochemical complex,” Hossein Qorbanzadeh said in a talk with IRNA.
PGPIC is the biggest consortium of domestic petrochemical producers. With a market capitalization of 3,010 trillion rials ($10.7 billion), it is the largest company in the Tehran Stock Exchange and the second largest in the Middle East with 60 subsidiaries.
Qorbanzadeh said the divestment would be in a block sale. “Our first priority is to sell the entire 18% stake in a block of shares. If unsuccessful, three separate blocks would be the next option.”
Block trade typically involves a large numbers of equities or bonds traded at an arranged price between two parties. At times this is conducted outside open markets to lessen the impact on the security's price. Due to the size of block trade, individual investors are rarely involved.
Block sale of shares in Iran has been tried and tested but failed several times simply because under the dire economic conditions buyers don’t have that type of money (millions of dollars).
Earlier in the week, Qorbanzadeh spoke about a plan to offer shares of state-owned Shazand Oil Refinery via the stock market.
The divestment would come on the heels of government efforts to realize at least a segment of the projected revenue from divesting shares.
As per the budget, the government expects to make 940 trillion rials ($3.3 billion) from divestments in this calendar year that ends next March.
Of the projected income, the government reportedly generated only 7.02 trillion rials ($25 million) in the first half of the current fiscal year (March 21-Sept 22).
Companies on the divestment list in H1 included giants like Esfarayen Industrial Complex, Pars National Agro-Industry and Animal Husbandry Company, Iranian Catalyst Development Company and Hegmataneh Petrochemical Company.
Isfahan Water and Wastewater Consulting Engineers Company, Shahid Abbaspour Dam and Power Plant, Wood, Metal, Plastic and Electronic Industrial Complex (aka Sima Choob owned by the Islamic Republic of Iran Broadcasting) are also on the list plus residue shares in Bank Saderat.
Qorbanzadeh earlier concurred that major changes are needed in the privatization scheme to be able to downsize the government.
In a meeting with private sector leaders, he said the main problem with most of the government’s privatization plans is that it insists on “controlling interest” of companies it sells.
