The Iranian Privatization Organization has added 20 state and government owned companies to the list that the government plans to fully divest.
According to a press release seen on the IPO website, the new candidates are refiners in Kermanshah, Khuzestan and Arak plus the giant Persian Gulf Star Oil Company, in which the government has a 17.9% stake.
The list includes Esfarayen Industrial Complex, Esfarayen Lule Gostar Company, a steel tube firm, Jajarm Aluminum, South Aluminum Company, Azarbaijan Steel company, two steel companies in Baft and Meibod in Yazd Province, Kish Airlines, two mass construction companies affiliated to the Urban Regeneration Corporation, Sefidroud Agro and Livestock Company, Sugarcane & By-Products Development Company.
The two main football clubs, Esteghlal and Persepolis, are also on the list. The clubs recently went public but the government still holds majority shares.
It should be noted that the government has already sold some shares in most of these companies through initial public offering except for Kish Airlines, Khuzetan Refinery and Azerbayjan Steel Company, in which the government has full ownership.
According to the 2022-23 budget, the government expects to generate 710 trillion rials ($2.4 billion) from divestment.
Observers say this is a tall order, citing disappointing results of the government divestment agenda in the recent past.
Recalling the poor performance in monetizing the remaining stakes in several listed companies this year, Hossein Qorbanzadeh, the IPO chief, earlier concurred that the “government’s projected income would likely not be realized”.
Revenue from selling shares “is not a sustainable income source similar to taxes” and a variety of factors are at play when it comes to the realization of projected income as envisaged in budgets.
As one hurdle to divestment process is the fact that in many cases the target companies have put their shares as collateral with banks to borrow.
The government has long struggled to fully privatize some big companies by ceding the remaining stakes. National Iranian Copper Industry Company, Mobarakeh Steel Company and automakers Iran Khodro (IKCO) and SAIPA are some big names in which the government is the main shareholder.
