Privatization Opportunities

Tenders

The National Agency of Investment Privatization invites national and foreign companies to participate in the procedure of selecting a strategic investor for the following enterprises:

Industry Proposed shares Status
Production of building blocks
OJSC Baranovichi Reinforced Concrete Products Pant» 99%  
Food industry
OJSC Minsk Margarine Plant

94%

International tender is announced
OJSC Konfa 50.07%  
Medical instruments
OJSC Medplast 99.9 %  
Gas supply and other engineering networks
OJSC Belgazstroy 50.6%  
Construction and installation repair work on sanitary-engineering, gas and ventilating systems    
OJSC Belsantekhmontazh-2 77.4%  
Maintenance and construction of roads
OJSC Avtomagistral

98.04%

 
OJSC Construction and Mounting Trust No.8 99.8%  

The aim of the privatization program is to implement a small scale case-by-case privatization program in accordance with international best practices.

Small and medium sized State Owned Enterprises (SOEs) representing different industrial sectors have been identified for the first pilot privatization and assigned to the Agency to privatize.

The Agency has the following goals in the field of privatization: introduction of new, advanced approaches to privatization based on international best practice and attraction of the best strategic investors to develop the companies being privatized.

The privatization process is conducted through open and transparent international tenders with the participation of widely known financial advisors (investment banks or consulting companies).

With the support of the World Bank, the Agency is implementing a pilot privatization project, which includes the following stages:

Stage 1. Selection of companies

Careful selection of candidate companies for privatization is of great importance and shall take into consideration all possible economic, social and political risks. The Agency collaborates with the State Property Committee, the Ministry of Economy and the World Bank in process of selecting companies for a case-by-case privatization in accordance with specially designed criteria.

Criteria Basis Benchmark
1. Financial Attractiveness a) Revenue >Annual sales of 30 million USD
  b) Profit Profitable (Net Profit after Taxes) for the last 2 years
  c) Liabilities Total long term and short term debts < 50% of total assets
  d) Investment requirements Maximum investment requirements for the next three years should be < 60% of total annual sales
  e) Social (non¬core) assets Social assets < 10% of total assets
2. Employees a) Number of employees <3,000
  b) % of working population in a town, hired by the company <30% of the employed in a town
3. Limited Government Regulation a) Price regulation Companies operating in industries where prices of inputs or outputs are not fixed by government or directly regulated
  b) Subsidies Companies that are not dependent on government subsidies
4. Negligible Value Chain Effects Vertical integration Limited vertical integration
5. Minimal Environmental Liabilities Environmental liabilities Companies that are not located in Chernobyl-affected areas and other companies with significant environmental liabilities

Stage 2. Involvement of financial advisors

A core component of the project includes the involvement of financial advisors (internationally reputable investment banks or advisory firms) to assist the Agency in executing privatization transactions, including all preparatory work, structuring sale, implementing actual sale and performing appropriate post-sale activities for privatization of state owned enterprises (SOEs).

Stage 3. Preparation of joint-stock companies, which is carried out by the Agency jointly with financial advisors

  • Financial advisors carry out an operational, financial, and legal analysis of companies and collection of the documents required for the procedure of a complete due diligence at the transaction stage;
  • Recommendations of the measures aimed at increasing attractiveness of companies are developed;
  • Companies are evaluated pursuant to the Belarusian legislation and following the internationally accepted methods;
  • Market interest to a company, including drawing up the list of potential strategic investors, is evaluated;
  • Financial documents of the company are drawn up pursuant to the international financial reporting standards;
  • A strategy to attract an investor is developed.

Stage 4. Interest analysis

  • Drawing up and circulation of an information memorandum;
  • Informing potential strategic investors;
  • Inspection of strategic compatibility of the investors that have expressed their interest;
  • Access of potential investors to the information about companies required to carry out the procedure of complete inspection;
  • Analysis and evaluation of the investment offers of potential investors, holding negotiations.

Stage 5. Making a privatization deal

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Telefon: +375 17 200 81 75, +375 17 200 52 89

E-mail: mail@investinbelarus.by

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