Jafar Sobhani, an advisor to IPO, said the divestiture is part of a broader government plan to divest its shares in the remaining 18 companies, IBENA reported.
Government shares in the companies amount are 15 trillion rials ($115 million).
Accordingly, 17.34% of the shares in Alborz Insurance Company worth 1.1 trillion rials ($8 million) are set to be offered in the stock market on July 13, Financial Tribune reported.
Likewise, 20% of the shares in Shiraz Oil Refining Company and Lavan Oil Refining Company worth respectively 7.3 trillion rials ($56 million) and 6.6 trillion rials ($50 million) will be offered on July 15-16.
The number of shares in the said companies is 869.27 million in aggregate which is to be offered in the Tehran bourse and the junior stock market, Iran Fara Bourse.
TSE will trade shares of Alborz Insurance Company which comprises a block of 639.56 million shares. The price of shares on the market bulletin a day prior to the offer plus 20% will be considered as the base price. However, the base price should not be less than 1,581 rials per share.
Shares of Shiraz Oil Refining Company and Lavan Oil Refining Company are planned to be offered in blocks of 1.27 million and 228.6 million shares via the IFB.
The base prices of shares of both companies are based on prices shown on the market bulletin a day prior to the offering plus 20%, with the difference being that the final price for the former must not be less than 35,500 rials and, for the latter not less than 29,116 rials.
Regarding the remaining companies on the divestiture list, Sobhani did not give a timeline about their share offer.
A Gradual Process
He had said earlier that the shares would be sold “gradually” to prevent shock in the market.
The remaining assets on sale include a 20% stake in state-owned oil refineries in Tehran, Tabriz, Bandar Abbas, Esfahan, 17% in Tejarat Bank and Bank Mellat each, 18.3% in Bank Saderat Iran, 11.44% in Amin Reinsurance Company, 18.96% in Persian Gulf Petrochemical Industries Company, 12.05% in National Iranian Copper Industry Company, 17.2% in Mobarakeh Steel Company,14.04% in Iran Khodro (IKCO), 23% in SAIPA, 40% in Pars National Agro-Industry and Animal Husbandry Company, and 13.02% in National Investment Company of Iran.
The divestiture will be handled by IPO and is in line with Article 44 of the Constitution that offers opportunities to private enterprise, promotes downsizing and curbs the bloated bureaucracy.
According to existing privatization laws and as per Article 44, state-owned enterprises fall into three main groups.
The government is barred from ownership, investment and managerial posts in Group One. Likewise, it is obliged to transfer 80% of the total firms in Group Two to private, cooperative, public and nongovernmental organizations. Ownership, investment and managerial positions in Group Three is exclusive premise of the government.
Of the 18 entities on the latest divestiture list, three fall into the first group. The remaining 15 companies, including refineries and petrochemical companies, are in the second group.