Page 37 - IRANRptSep22

6.1.2 Budget dynamics - funding, privatisation
Iran ‘scraps plans to sell holdings in largest petrochemical company PGPIC after receiving just one bid’
Iran aims to privatise 600 companies in current Persian year
Iran’s government has scrapped plans to sell holdings in the country’s largest petrochemical company, Persian Gulf Petrochemical Industries Corporation (PGPIC), citing a lack of sufficient bids, Press TV reported on January 22.
The Iranian Privatization Organization reportedly confirmed the cancellation in a letter sent to Iran’s stock exchange authority.
The government previously said it would sell PGPIC shares amounting to 18% of the company’s equity in three separate listings.
The letter from the privatisation authority was reported as stating that just a single bid for the largest block of shares in PGPIC, equivalent to 15% of the equity, was received. The offered price was said to have been deemed too low by privatisation officials.
The government hoped the listing would raise around Iranian rial (IRR) 5.6 trillion ($2bn) for cash-strapped government coffers.
The head of the Iranian Privatisation Organisation (IPO) has announced that some 600 companies are to be fully or partially sold to private buyers in the 2019/2020 Persian calendar year (started March 21), IBENA reported on April 28.
The Rouhani administration is under growing pressure to allow more assets on to the market at a faster rate so that capital can move from the roiled currency markets and back into the local economy. With the Iranian rial (IRR) severely weakened by the US sanctions assault on Iran’s economy and Washington to launch its attempt at fully shutting down Iran’s oil exports on May 2, the government is under heightened pressure to increase efforts to deliver liquidity. IPO director Mir Ali Ashraf Abdollah Pouri-Hosseini said that of the current block of companies to go up for sale, all the shares would be available to buyers except for 20% in each case, except where otherwise stated.
However, it will be an uphill struggle to sell majority stakes in so many businesses, with Pouri-Hosseini noting that across six months of the previous calendar year, only 55 companies were privatised.
“If we can privatise double or triple this amount, still there would be many companies for sale,” he added.
6.1.3 Budget dynamics - subsidies
Raisi announces major reforms to Iran’s consumer subsidies system
Iran’s President Ebrahim Raisi has announced major reforms in the country’s subsidies system.
Hardliner Raisi, who entered office last summer, outlined how his reform plan would work during a televised late-night interview on May 9. His administration says that the subsidies system introduced by his predecessor, pragmatic moderate politician Hassan Rouhani, to bring price stability amid the pressure of heavy US sanctions ended up facilitating high levels of corruption.
“The prices of bread, medicine and petrol will not increase under any circumstances,” Raisi pledged in the interview.
Worries that the planned system was already allowing price jumps for consumer essentials such as bread were in circulation on May 12 with reports of street protests in the southwestern province of Khuzestan.
The shake-up includes cash subsidies for the vast majority of Iran’s population
37 IRAN Country Report September 2022 www.intellinews.com