The 137-billion-rial ($3.7 million at market exchange rate) stake is being offloaded as part of the government’s privatization program.
Economy, Business And Markets

IPO Offers 20% Stake in Petrochemical Complex

The Iranian Privatization Organization is selling a 20% stake in Hamedan’s Ibn Sina Petrochemical Complex to the public on Nov. 21.
IPO will act on behalf of National Petrochemical Company, which owns a quarter of the petrochemical producer, and sell 8 million shares in the complex to the highest bidder. The base price for each share is 17,193 rials (47 cents).
The 137-billion-rial ($3.7 million at market exchange rate) stake is being offloaded as part of the government’s privatization program. The program is not going well recently.
With all major state companies already on the market, most companies offloaded by IPO these days are small, poorly run and financially troubled ones.
In a recent offering of nine companies worth 15 trillion rials ($418.5 million), lauded as the largest sale of government-owned companies in the current fiscal year (started March 20), only 740 billion rials of the shares found buyers.

  Just the Right Amount of Incentive
Because of the poor condition of companies left for privatization, the organization faces a pricing dilemma. If the companies are offered at their “real value”—what the government thinks they are worth—finding buyers will be difficult.
On the other hand, if the companies are offered at lower prices to attract bidders, the organization can bet on facing allegations of corruption and rent from political figures.
Nevertheless, IPO is sweetening the offer to attract investors and assure a smooth sale. The winner of the auction will only have to put up 10% of the selling price initially within 20 working days and pay the rest in six-month installments during an eight-year period.
However, to get a foot in the door for the auction, bidders must first put up 4.1 billion rials ($113,000). Without the deposit, you cannot bid for the complex.
Whoever buys the company will become its second largest shareholder and get a seat next to Hami Foolad Iranian Company.
The government’s petrochemical industries development committee established Hamedan’s Ibn Sina Petrochemical Complex in January 2012 to produce ethylene oxide and its downstream products.
The plant produces ethylene oxide, ethanol amine, methyl diethanolamine, glycol ether and ethoxylates.

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