Azerbaijan determines priorities in privatization of large enterprises

"Large enterprises are expected to be privatized in the sphere of machine building, chemical industry, agricultural sector, manufacturing industry, education, health and culture," said Hasanov.

For the privatization of large enterprises, the State will co-operate with the independent auditor and consulting companies in the process of attracting investors (for privatization separate facilities of AZAL, assessment of share of the Ministry of Communications and Information Technologies in joint ventures, state share in authorized capital of the International Bank, Kapitalban k, etc.)

Formerly, in order to reduce potential concern about the possible shift of strategic enterprises to the ownership of foreign investors, the Asian Development Bank (ADB) offered to put the shares of privatized enterprises in the infrastructure on sale via the Baku Stock Exchange.

Thus, the partial privatization can contribute to and develop the securities market in Azerbaijan. Companies in the sphere of infrastructure (excluding oil and banking sectors) because of the
volume and financial capacity may be considered the only company where local investors can be involved. In the long term outlook, the possibility of partial privatization of SOCAR through the Stock Exchange can be considered, the experts of ADB said.

ADB believes that the government should determine the maximum level of state share in infrastructure and communal services. Despite the Government's desire to retain control over these sectors, it should be implemented not through maintenance of state's dominant share, but in the form of a blocking package. The key issue in this approach is to ensure the effective development of this sector that could reach onlywith the involvement of the private sector, without the intervention of the state and the activities on commercial principles. Moreover,
these components must be an integral part of a program to accelerate the privatization of infrastructure enterprises.

In addition, it is intended to use the system of corporate governance. World practice shows that the best form of implementation of rights management and management of State Property of the fully or partially privatized enterprises is the management of state assets in the independent and commercial form or in the form of holding.

/Trend Capital/