Iranian year (March 2007-8), the privatization drive mainly focused on the stocks of companies affiliated to Industries and Mines Ministry as well as subsidiaries of Industrial Development and Renovation Organization (IDRO) and Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).
At the beginning of last year, the primary concern was also the transfer of shares of power plants, refineries, petrochemical companies, banks, insurance and telecommunication companies to the private sector, but since the go-ahead was not given, their stocks were not traded at the Tehran Stock Exchange (TSE).
However, the privatization drive has gained momentum in 2008-9. Recently, TSE approved the sales of stocks of Khuzestan Steel Company and Khorasan Steel Company as well as 5 percent of the shares of National Copper Company. However, the date for this has not yet been specified.
Head of Iranian Privatization Organization (IPO) Gholamreza Heidari Kord-Zanganeh told ISNA, “TSE’s move was aimed at ensuring a speedier implementation of Article 44. Moreover 5 percent of the stocks of Bank Mellat and Bank Saderat of Iran will be traded on June 18 and July 7, respectively.“
The privatization of banks is tied to the approval of their articles of association. Efforts are also underway to take into account budgetary and auditing considerations so that stocks can be traded in a timely manner.
On the transfer of ownership of other governmental corporations to the private sector, Kord-Zanganeh observed, “Some 2.5 percent of the stocks of the shipping industry, 5 percent shares each of Isfahan Refinery and Telecommunications Company of Iran will be sold to the private sector through TSE on May 17, May 25, and June 11, respectively.“
TSE has also approved the trading of Bank Tejarat and Tabriz Refinery shares.
Before trading its stocks, Bank Tejarat must be registered as a public joint stock company. Furthermore, Central Bank of Iran (CBI) must authorize the transfer of stocks and Bank Tejarat must make the commitment that it will initially offer 5 percent of its stocks for price evaluation and another 15 percent upon the approval of TSE.
Tabriz Refinery must also be registered as a public joint stock company before its stocks can be traded in the stock market.
Furthermore, contracts for transport of crude oil with the related pipeline company, purchasing crude oil with National Iranian Oil Company (NIOC) and sales of oil derivatives with National Iranian Oil Refining and Distribution Company must be concluded and made public.
Meanwhile, articles of association of 10 power plants to become public joint stock companies have been endorsed by the Guardians Council and the transfer of ownership of their assets will be completed this year. This could be a long process, which must be eased in cooperation with senior Energy Ministry officials.
All in all, privatization drive is back on track and this year positive developments are expected at the TSE.