Privatizations surpass $516m in 3 months: IPO chief

Iran Materials 16 June 2009 11:18 (UTC +04:00)

TEHRAN (MEHR - Trend )

Iran Privatization Organization (IPO) managing director stated here on Saturday that some 5 trillion rials (about $516 million) worth of shares of state-run entities have so far been divested as of the beginning of the current calendar year (March 21, 2009).

Gholamreza Heidari Kord-Zangeneh said IPO had planned to privatize 37 companies and banks in the three-month period, however the shares of 42 entities, including three banks of Mellat, Tejarat, and Saderat, have been transferred to the private sector, reported the Mehr News Agency.

Bank Saderat Iran offered 6 percent of its shares, worth one trillion rials (about $103m), as an initial public offering scheme on June 9.

Bank Mellat was the first Iranian bank that offered 750 billion rials (about $77.5 million) worth of its shares on February 18. A 5% block of Tejarat Bank shares were also offered on May 18 on the Tehran Stock Exchange as the second privatization-bound bank.

According to Iran's Fourth Five-Year Economic Development Plan (2005-2010) the Privatization Organization of the country affiliated to the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public on the stock market.

The current privatization effort calls for an initial public offering of five percent of the firms being privatized. Once the five percent is public, it will establish a market price which further offerings can be based on.

According to a study conducted by the International Monetary Fund in 18 countries, privatization adds 2 percent to the government's gross domestic production per annum.