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Home > Privatization Alert - May 2007
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Privatization Alert - May 2007
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The World Bank reported recently that the pace of privatization by developing countries increased in 2005, with some 195 transactions worth $57 billion, compared with 170 transactions worth $33 billion in 2004. China and Turkey accounted for a third of the value over 2004-05, owing to the sale of mostly minority shares in banking and insurance in the case of China and the sale of Turk Telekom in the case of Turkey. Europe and Central Asia was responsible for the bulk of privatization activity, followed by East Asia. In other regions, significant privatization activity was registered in Pakistan and Nigeria. Privatization in Latin America has declined dramatically. In terms of sectors, telecoms generated the most revenue, while the share of infrastructure in total value declined from 55 percent in 2000-03 to 42 percent in 2004-05.
Status and upcoming transactions
Sub-Saharan Africa: The Bureau of Public Enterprises in Nigeria has been actively selling off state enterprises over the past two years, completing 61 transactions, including the sale of several port terminals, and raising N500 billion during 2005-06. Recent privatizations include NITEL and upcoming ones include a 51 percent stake in Port Harcourt Refinery and Petrochemical Co., the News Agency of Nigeria, the Nigerian Television Authority, the Federal Radio Corporation of Nigeria and the Nigerian Film Corporation. Zambia has sold some 260 state-owned enterprises as of December 31, 2006, and another 22 companies are in the privatization pipeline.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
South Asia: Pakistan has attracted considerable foreign investment through privatization. In 2006, the Privatization Commission completed the sale of Pakistan Telecommunication Company, as well as several companies in oil/gas, infrastructure, banking and tourism. Upcoming deals include a 51 percent stake in Pakistan State Oil Company.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
East and South East Asia: China’s ongoing privatization program has recently met some opposition in the form of a petition by local scholars after a new law passed protecting private property. Vietnam intends to offer for sale shares in PetroVietnam Fertiliser & Chemicals, the largest manufacturer of fertilizers, but will retain a 70 percent stake. Myanmar has privatized some 288 enterprises since the inception of the privatization program in 1995 and has slated for privatization its largest state-run gold mine. Indonesia is expected to complete the sale of its national airline Garuda this year.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Europe and Central Asia: Russia reported that its privatization proceeds declined by 46 percent in 2006. Its largest privatization transactions last year were Sochi Airport, Far East Shipping Company and All Russia Bank for Regional Development. The new list of enterprises slated for privatization over the next two years includes Sibir Airlines. Georgia’s Ministry of Economic Development is continuing the implementation of its privatization program, with several companies and properties offered for sale. Ukraine’s Cabinet of Ministers recently endorsed the 2007 privatisation plan. Poland’s Ministry of Treasury has published the list of initiated and ongoing privatization projects for 2007.
In Kosovo the Kosovo Trust Agency has launched the 25th wave of privatizations. To-date, privatization has resulted in the sale of over 230 enterprises, generating over Euro 280 million in revenues. Bulgaria is expected to offer for sale 70 percent of the Bulgarian Maritime Navigation shipping company, the state company in charge of its merchant fleet. Romania is preparing the privatization of an automobile factory, which used to be owned by Daewoo before it was bought by the government when the company went bankrupt. Serbia has announced its plan to complete the privatization of more than 1,000 publicly-owned enterprises this year, thus ending its privatization program. According to Invest in Serbia, publicly-owned enterprises that fail to find a purchaser of 70 percent of their equity capital by the end of the year will be declared bankrupt by default. Yet to be completed is the sale of Oil Industry of Serbia and the Electric Power Industry of Serbia.
Turkey has recently announced the privatization tender for the sale of 51 percent of the public shares of PETKIM Petrokimya Holding A.S., which has received considerable interest from foreign investors. The privatization of T. Halk Bank Inc., the country’s leading finance provider to small and medium-sized enterprises, took place in May, with large participation by foreign investors.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Middle East and North Africa: Libya has recently privatized the state-owned Sahara Bank. Jordan is expected to complete the privatization of its national carrier, Royal Jordanian Airlines, by the end of this year.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
Latin America: Colombia has slated for sale its share in five power distribution companies by July of this year. Peru’s privatization tender of the Michiquillay copper deposit has been awarded to Anglo American.
>> Complete list of regional project opportunities
>> Detailed country analysis by region
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