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President Putin of Russia has announced that the Russian Government has placed majority stocks of Federal Grid FSK and power distributor MRSK Holding on a list of assets that cannot be sold to private owners, making it unlikely that they will be part of the government’s privatisation drive in the near term.
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Putin signed a decree that made 79.55 percent of FSK and 53.69 percent of MRSK strategic assets, to go along with 60.38 percent of power giant Rushydro. As a result, any further privatisation will need fresh approval by Putin before it can proceed.
Derek Weaving, power analyst at Renaissance Capital, said the announcement may prevent the sale of MRSK Holding, but the regional grid firms it controls could still be sold off on an individual basis. He said: “I don’t think anybody thinks FSK would be privatised, and with MRSK Holding, it does not prevent the sale of regional grids. MRSK is a holding company. It is a shell; it has no assets and no cashflow.”
The CFO of MRSK said that the company has been in talks with financial advisors about spinning off “two or three” regional companies over the next few years.”
Igor Sechin, the Acting Deputy Prime Minister of Russia, said that the country was considering the creation of a national electricity company, without giving a timeline. The government, which own a majority share in MRSK, ordered that the company be put under the management of FSK, MRSK said in a statement.
As a result of this and the slump in oil, Russian stocks have tumbled, driving the RTS Index down 20 percent from this year’s high.