Eastern Europe state sales see patchy progress

LONDON: Central and Eastern European countries are moving forward with long-planned privatisation programmes though progress remains patchy due to mismatched price expectations between state sellers and buyers.

Growing inflationary pressures are also fanning fears that governments will continue to influence companies even after they have pared back their ownership.

However, Greece's plans to sell 50 billion euros worth of state assets in the coming years are seen unlikely to sap interest in eastern Europe.

Countries such as Poland and Russia are seeking to bolster public finances, attract investment flows and inject foreign expertise into moribund local industries.

Here are updates of state asset sale plans in the region:

ALBANIA

Albania plans to privatise its Albpetrol oil firm and sell hydropower concessions on two of its southern rivers this year in its last big wave of state sell-offs.

The privatisation of Albpetrol follows the sale two years ago of an 85-percent stake in the firm's then-subsidiary Albanian Refining and Marketing of Oil (ARMO).

BELARUS

Belarus has been urged to sell off state assets to plug a large current account deficit and potential targets include potash giant Belaruskali, truck makers MAZ and BelAZ as well as GSM operator MTS Belarus.

Russian Finance Minister Alexei Kudrin said in May Belarus could get $7.5 billion from privatisation within the next three years but recent comments from Belarussian leader Alexander Lukashenko suggest Minsk is unlikely to embark on an aggressive drive to sell assets to Russian firms in return for financial assistance.

BOSNIA

The government is expected to endorse by the end of June a draft proposal to sell its stakes in four firms this year.

The sale will comprise a stake in construction firm Hidrogradnja, as well as shares in furniture maker Sipad Export-Import, conglomerate Unis, and oil retailer Energopotrol, whose majority owner is a consortium of Hungary's MOL and Croatia's INA.

BULGARIA

Bulgaria opened a long-delayed tender to sell its majority stake in state cigarette maker Bulgartabak in April as the centre-right government tries to boost public revenues.

The winner will be picked in September in a deal estimated to be worth 100 million euros.

The government plans to float its majority-owned stock exchange and its 33-percent stake in power distributors controlled by Austria's EVN, Czech CEZ and Germany's E.ON .

CROATIA

Croatia is on track to complete the sale of its loss-making shipyards as part of the conditions it must meet to secure European Union membership.

Two local investors are keen on the assets and Zagreb needs to get EU approval for the sale process to complete entry talks.

Croatia has also said it would sell stakes in firms where the state has less than 25 percent. The process has kicked off but few of the firms on offer have so far found buyers.

The government is also mulling divesting companies where it is a majority owner, including local insurer Croatia Osiguranje or the country's biggest bank, Hrvatska Postanska Banka.

Apart from the shipyards, the privatisation process is unlikely to speed up before the general elections at year end.

CZECH REPUBLIC

The government is planning to partially privatise the country's pension system to cope with an ageing population and has said it is committed to keeping a qualified majority of 60 percent in power group CEZ.

ESTONIA

The government sold a minority stake in Eesti Telekom late last year after refusing to divest it for years.

The coalition government that took over following March elections has agreed it may sell some state assets in the next four years but does not have any concrete plans as yet.

The Economy Ministry has previously identified assets such as the country's port in Tallinn, the postal service as well as its stake in the recently re-nationalised airline Estonian Air as possible divestment candidates.

HUNGARY

Since taking over the reins last May, Hungary's centre-right government has talked of wanting to grow, rather than sell-off, state assets.

After months of negotiations, Budapest ended Russian ownership in Hungarian oil and gas conglomerate MOL last month when it agreed to buy back a 21.2 percent stake held by Surgutneftegaz in MOL for 1.88 billion euros. The deal will have to be completed by the end of August.

The government has also effectively renationalised Hungary's mandatory private pension funds, and these pension assets - worth about $14 billion - will be transferred to the state this month.

Copyright Reuters, 2011