Russian Finance Ministry wants to step up privatization

The Russian Finance Ministry considers it appropriate to discuss the possibility of large-scale privatizations again, the relevant minister, Anton Siluanov, said yesterday at a meeting of the Board of Directors of Rosimushchestvo, the federal agency for the management of federal property, Interfax reports, according to Agerpres.

"At a general level, I would like to ask Deputy Prime Minister Marat Khusnullin to come up with a proposal on large-scale privatizations," Anton Siluanov said, adding: "In our opinion, now is the time to put this topic back on the agenda."

The Russian Finance Ministry has periodically made such proposals in recent years, including to the Government, but these ideas have not been implemented, mainly due to opposition from several Russian Government agencies.

Anton Siluanov also said yesterday that the Ministry he heads plans to intensify the privatization of property under the administration of the State Treasury, including through court decisions. "In 2025, the proceeds from the sale of such property are expected to amount to at least 100 billion rubles," Siluanov said.

The Russian Finance Ministry also believes that it is necessary to maintain the trend of increasing budget revenues from the sale of unused property. Dividend income of more than 400 billion rubles should be secured in 2025, excluding dividends from Sberbank, which are included as income from the Sovereign Wealth Fund of Russia, Siluanov said.

Russian authorities began to accelerate the pace of nationalizations this year after local courts ruled that a large private grain trader, Moscow's Domodedovo airport, and several strategic warehouses should be transferred to state control. Foreign companies have faced the risk of their assets being taken over by the Russian state since the start of the invasion of Ukraine in February 2022, but Moscow has recently begun targeting more local assets in the name of strategic stability and internal security.

Recall that this week, Russian President Vladimir Putin gave permission to a US hedge fund to buy securities in Russian companies from certain foreign shareholders, and authorized their future sale to two Russian funds, according to a presidential decree cited by Reuters.

Moscow has tightened restrictions on the sale of foreign assets since the beginning of the conflict in Ukraine, with any transactions in the energy and financial sectors requiring Putin's approval. The decree authorizes the fund 683 Capital Partners LP to buy securities in Russian companies owned by a number of Western funds. Then two Russian funds were allowed to purchase securities held by 683 Capital Partners, without the need for authorization from the Russian president.

International sanctions imposed on Russia following its invasion of Ukraine have blocked many Russian investors from accessing securities held in jurisdictions outside the country, while Moscow's retaliatory measures have frozen Western assets in the country.