One should not expect that privatization assets would instantly find its buyers. The most important thing now is to put them up for sale, and the timeframe will be determined by the market.

It is planned that most part of the assets will be sold within 3 years. Financial director – member of the Management board of «Samruk-Kazyna» JSC Mr. Nurlan Rakhmetov told about current privatization and its first results to «&».

- Nurlan Kussainovich, almost 6 months have passed from the start of privatization. Can we draw some results?
- Currently we have sold 9 assets through direct sales, auctions, as well as the pre-emptive right. These organizations specializing in repair and maintenance, service and security companies. If we add it up, the initial price of assets in total was about 1,9 billion tenge, and the gained sum was a slightly more than 3,5 billion. In my opinion this is rather good indicator for a start. However, it is too early to speak about the results of the year. I think, by January the number of assets sold will increase and the sum of revenues from sale is not final, it will grow.

- Some analysis have already commented in the mass media that successful privatization is in question, that the fund will simply not be able to sell all 64 assets by the end of the year, which have been scheduled.
- The truth is that we did not set the task to sell them all this year. We have 106 assets for privatization over three years so far. I am talking about the list that was approved by the Act of the Government. There is no guarantee that it will not change. Let’s say, in 2011-2013, we have sold 405 assets, this will mean that our assets are interesting to the business. Now our task is to prepare these 64 assets for sale. Part of them will be sold this year, part – next year. I can even tell you, we would have sold these assets even without privatization program, but these plans were for 5 to 10 years. But the Government, as our shareholder gave us a good impulse to do the work in the next three years.
- What were the criteria for the companies in this list?
- The principle is simple. The state has fixed those areas, where it will continue presence. In particular, through the «Samruk-Kazyna» JSC enterprises. First, these are sectors of strategic importance for the country, on which the development of the country depends in general.  Let’s say, almost in all developed counties, for instance the USA and Germany, the railway sector is under control of the state. There are other sectors as well. These can be pipelines, gas pipelines, electricity transmission lines, basically, infrastructural enterprises. Second, these are sectors, to which the investors do not pay much interest. The state also participates there without creating obstacles for competition to business. Currently the state has clearly defined where it should be present. Furthermore, just as any other company «Samruk-Kazyna» has a development strategy. If some types of the activities do not reflect the strategy and profile, we discontinue them. These are, probably, the main criteria for creating the list.

- Who are the new owners of the sold enterprises? Recently a question was raised in the Majilis that the campaign is not transparent enough and the main claim was, that the names of the buyers were not made public.
- I think this question should not be directed to me. We do not set these rules. There is a law, according to which we act. As far as I know, there is a discussion going on in the National chamber of entrepreneurs on the matters, whether the names of the buyers should be disclosed. I think that some consensus will be achieved. What I can confidently say is that the fund’s intent is to have maximally transparent procedures.
All information about the assets for sale and those that have already been sold is published on the official website. There is a commission on assets sale in all subsidiaries and the fund itself; it includes also representatives of the National chamber of entrepreneurs and parliament members. Therefore, all the decisions on sale are under public control. The bidding itself is done on the electronic platform of the Ministry of finance of the RK. Hence, the possibility of outside intervention or attempts to influence the outcome is excluded.

- It was said earlier, that not only the citizens of Kazakhstan, but also foreigners can take part in the bidding. Do our fellow citizens have some preferences?
- I think we will not have such limitation, except for the cases stipulated in the law. If assets are sold that can have strategic importance and are important for defense of the country, or which require permission of the Commission on strategic assets, I do not exclude the possibility that for these assets there will be limitations to non-residents. In general, though, as a fund we do not set these limitations, meaning the foreigners can participate through equal conditions.

- Is there a risk that the company will not work according to its current profile, and the new owners will do reorganization of some kind? Is this a risk at all?
- If we could find a business with no risk, probably, everybody would have been happy. Any business has risks both on part of the seller and buyer. There will always be risks. Let’s consider that the prices of fuels will drop. These, are naturally risks. Therefore, we cannot fully eliminate the risks for the potential buyers in this privatization. However, we are practically in equal conditions. It can happen that we will sell it with a price lower than fair value. We also take risks. And we do not guarantee as buyers, that «I sell you the asset, live happily ever after, there are no risks». Another thing is that as state company we try to mitigate them. I am talking primarily about the risks related to employees. For those assets that are sold through e-bidding we require to keep the jobs for a year after the deal, so that people would continue working, and core activity would be preserved. So that in this year, if plans of the new owners change, they would have opportunity to add qualifications, find new jobs. However to some extent we have confidence that the assets, which we have put for sale, are sustainable from the standpoint of economic development, and the new buyers will probably have no incentive to change the core activity. This is a business that can bring continuous revenues, that is why, I think, they will expand it and create new jobs.

- It is clear that the fund’s intention is to get good proceeds from this sale. What is the purpose for using this money?
- Any businessperson, when selling an asset, tries to invest into business development, meaning not spend for operational expenses, but to invest. Therefore, in simple terms, this is a general investment project. There is a huge portfolio of these projects in the fund. All proceeds will be invested in implementing perspective investment projects in the next 10 years. Total portfolio of such projects is now 150 billion USD. In general, it can be said that we are planning to invest money from sale of the assets in perspective business projects. 

Source: Business & Vlast