11.02.2013

Auction House of the Russian Federation becomes operator for selling RF property

On 31 January 2013, a pilot project was launched for attracting an independent seller for the sale of privatized federal property. In accordance with a decree of the Government of the Russian Federation of 31.01.2013 № 101-r, functions for selling the shares of 36 share-holding societies in federal ownership have been transferred to the Auction House of the Russian Federation.

The AHR is one of the legal entities selected by the Government of the Russian Federation to carry out the functions of a seller (auction organizer) of federal property. The Auction House specializes in selling property at classic, electronic and mixed auctions according to rules determined by legislation of privatization. This constitutes the considerable different between the method for realization property through the AHR auction platform and the practice of selling federal share packages with the involvement of investment banks, which carry out special-purpose transactions approved by the Russian Government.

In the list approved by the Government of the Russian Federation of the first 36 shareholding societies which the AHR will sell, there are both large and small companies in various fields, holding different positions on the market. This list includes exclusively non-control share packages, primarily from 20 to 30% of the charter capital of the issuer (21 companies). They include: 13.11% of shares UAZ, 25.5% in Murmanskoe morskoe parokhodstvo, 25.48 in NIPII Lenmetrogiprotrans, 10.96% in NII molekulyarnoi elektroniki I zavod Mikro, 25.5% in Sakhalinskoe morskoe parakhodstvo, 20% in Severnoe morskoe parokhodstvo, 25.5% in Sevzapelektroset stroi, and 25% in Tsentrodostroi.

As the AHR not only realizes state federal assets, but also regional property, and also property of private individuals, it can hold negotiations with other share-holding companies from the list about consolidating existing packages for joint sale. This will raise the investment attractiveness of the shares for sale, and thus ensure their realization at the maximum possible price, and accordingly bring additional revenue to the federal budget.

This practice was developed by the AHR in selling a share package in Yugratel belonging to the Khanty-Mansiisk autonomous okrug – Yugra. With the participation of the AHR, an optimum strategy for the sale of the asset was determined, allowing to consolidate a 100% share package of the regional cellular operator and ensure its effective sale for a price of 2.42 billion rubles. The shares were sold as a single lot belonging to the Khanty-Mansiisik autonomous okrug – Yugra and the Surgut city district municipal body.

As well as selecting the most effective method of realization shares put up for sale, the AHR aims to provide wide coverage of the upcoming auction to attract the maximum number of potential buyers, ensuring that the auction is accessible and open for all market participants.