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Privatization Opportunities

Objects of privatization

About project

With the support of the World Bank, the Agency is currently implementing a pilot project ‘Support for privatization’, which goal is to create an institutional framework for the introduction of an individually targeted and transparent approach to privatization in accordance with generally recognized international standards and taking into account the interests of the Belarusian state.

The peculiarity of the Privatization Project implemented by the Agency is an individual approach to each enterprise, which corresponds to modern world practice. This approach is designed to attract strategic investors who are able to ensure the further development of the company, whose shares are offered for sale.

In its activities, the Agency adheres to the principle of transparency and, in order to increase the international community's confidence in the privatization processes in Belarus attracts financial consultants (investment banks or consulting companies) whose credibility is recognized worldwide.

Pilot Project is annually audited. Based on the results of the audit conducted in October, 2019, the special financial statements of the Project for the period of January 1, 2019 – October 16, 2019 accurately reflect the financial situation of the Project. The funds of the Grant were used for the Project's purpose and in accordance with the International Accounting Standard. The Report on the audit results is available here.

Implementation phases

The project ‘Support for privatization’ includes the following stages:

1
Selection of companies

The process of selecting organizations for privatization with an individual approach is carried out by the Agency in cooperation with the State Property Committee, the Ministry of Economy and the World Bank in accordance with specially developed criteria.

Criteria Basis Benchmark
1. Financial Attractiveness a) Revenue Annual sales exceed $30m
  b) Profit Profitable enterprises (net profit for the last 2 years is analyzed). Companies demonstrating losses over the year, but with stable indicators in the past year can also be considered.
  c) Liabilities The total amount of obligations does not exceed 50% of total assets. The company must demonstrate the ability to pay off obligations and current payments
  d) Investment requirements Maximum need for investments does not exceed 60% of annual revenue
  e) Social (non¬core) assets Social assets less than 10% of total assets
2. Employees a) Number of employees Does not exceed 3,000
  b) % of working population in a town, hired by the company Less than 30% of the employed by the company 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 not dependent on government subsidies
4. Vertical integration Vertical integration Limited involvement of the organization in the value-added chain
5. Minimal Environmental Liabilities Environmental liabilities Enterprises not located in the zones affected by the Chernobyl accident and not associated with significant environmental obligations
2
Involvement of financial advisors

The pilot project calls for the involvement of financial consultants (reputable international investment banks and consulting companies) in the privatization process to assist the Agency in the implementation of privatization transactions, including all preparatory work, assistance in finding investors and structuring the procedure for selling state-owned shares.

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 the company is assessed, the list of potential strategic investors is made;
  • Financial documents of the company are drawn up pursuant to the international financial reporting standards;
  • A strategy to attract an investor is developed.
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.
5Making a privatization deal

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

E-mail: mail@investinbelarus.by