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WORLD NEWS Monday 16 May 2022

Venezuela plans stock sale in break from socialist model

By REGINA GARCIA CANO want to take to make the
Associated Press placement successful. I
CARACAS, Venezuela (AP) couldn’t tell you a certain
— Venezuela’s govern- time,” Pulido said, add-
ment is seeking private in- ing that an offering on the
vestors to pump funds into Stock Exchange of Cara-
vital but crippled state-run cas could not be structured
companies, decades after by Monday.
seizing them in the name of The government estab-
socialism. lished its own exchange
The government on Mon- in 2010. A government
day intends to offer 5% to spokesman did not respond
10% stakes in companies to a request for comment
ranging from telephone from The Associated Press
and internet service provid- regarding the exchanges it
ers to a petrochemical pro- intends to use.
ducer. In another country, Prato said the government
those industries might be is likely to use its own ex-
attractive targets for inves- change or a separate digi-
tors, but questions remain tal system for now but that
as to who would be willing it would have limited results.
or able to take a minority Henkel Garcia, director of
position in the Venezuelan the Caracas-based firm
companies that have suf- A view of an out of service National Telephone Company of Venezuela, CANTV, phone booth, in Econometrica, said the
fered from years of neglect Caracas, Venezuela, Friday, May 13, 2022. Associated Press companies require sig-
and mismanagement. nificant investments to im-
Adding to the mystery is to the government or those plain about poor basic ser- sanctions and two de- prove the quality of their
lack of details provided by with an appetite for risk. vices across the country cades of mismanagement services, which were much
the government about the The country is still under even if an election is not by socialist governments. better before they were na-
sale, including what price it economic sanctions im- approaching. But econo- But the government has tionalized. But he warned
is seeking for shares in the posed by the U.S. and other mists point out that Vene- taken steps to relieve some that the country lacks a
companies and on what countries that prevent in- zuela’s government needs of the economic pressures, mechanism to oversee the
stock market they might be vestors from being able to to improve some of those including by giving up its accounting and financial
listed. Some are speculat- funnel money to Venezu- services even if it is slightly long and complicated ef- reporting procedures of the
ing the move could be a ela’s state-owned compa- ahead of the 2024 presi- forts to restrict transactions companies, making it im-
first step toward returning nies. And the percentages dential election. in U.S. dollars in favor of the possible to guarantee the
the companies to private Maduro announced would “We are no doubt seeing a local bolivar, whose value private investment in the
hands. “We need capital not give private investors paradigm shift that is large- has been obliterated by in- state companies would be
for the development of all decision-making powers to ly forced by the circum- flation. appropriately spent.
public companies,” Mad- undertake much-needed stances but also largely fu- Some shares of CANTV “If this really is the begin-
uro said during a televised changes within the corpo- eled by political survival,” have long traded on the ning of the total sale or the
event Wednesday. “We rations. Luis Prato, senior economist Stock Exchange of Cara- total handing over of these
need technology. We need At the turn of the century, with the firm Torino Capital. cas, the country’s oldest companies, which for me is
new markets, and we are Chávez carried out a series “Since June 2014, with this exchange. Maduro during a probable scenario, one
going to move forward.” of takeovers in the electric- significant drop in oil prices, this week’s announcement would have to ask to whom
It’s a marked departure ity, telecommunications, the Maduro administration said the state-owned com- they would be handed
from Maduro’s predeces- natural gas and oil sectors. began to see a drop in oil panies would be listed in over because we have epi-
sor, the late President Hugo But the government made revenues. Then, we went the country’s “various stock sodes like the Russian one,
Chávez, who nationalized minimum investments in through a period from 2014 exchanges” without speci- in which these companies
many companies in his some of these companies, to 2019 of price controls, of fying. that once belonged to
bid to transform the South which have left them pro- a more intervening state.’’ But by Friday, Gustavo Pu- the state ended up in the
American country into a viding substandard servic- But as the state lost the lido, president of the Stock hands of people who were
socialist state. Among the es. Days-long power outag- ability to generate wealth Exchange of Caracas, had close to the government,”
companies Maduro men- es are common across the and growth, Prato said, ‘’it not received any informa- Henkel said. “So, it is a com-
tioned are CANTV and its country. Millions of house- began to make room for tion of the planned stock plex phenomenon that one
subsidiary Movilnet, petro- holds either do not have participation of the private sales. He said the process could say opens the door
chemical producer Petro- access to water or the ser- sector.” to register the other com- to something positive, but
quimica de Venezuela and vice is intermittent. Internet Venezuela is still under a panies and eventually list with the institutional weak-
a conglomerate focused in and phone services are de- protracted social, eco- them is lengthy and re- ness that we have and with
the mining sector. ficient. nomic and humanitarian quires the disclosure of fi- the lack of credible refer-
Interest, however, may be Government supporters crisis credited to plummet- nancial documents. ees, well, it might not end in
limited to investors with ties and opponents alike com- ing oil prices, economic “It takes as long as you the best way.”q