Russia to open $29 billion asset sales to foreigners

MOSCOW (Reuters) - Russia will open its most ambitious privatization programme since the 1990s to foreign investors, its economy minister said on Thursday, while the government gave its initial approval to the planned $29 billion in asset sales.

Thursday's government meeting gave the preliminary thumbs-up to the three-year privatization plan as part of draft budgets for 2011-2013.

"We currently have an excessive state share (in the economy) and it must gradually decrease. The privatization is also a possibility for us to influence the structure of our economy," Economy Minister Elvira Nabiullina told reporters.

"We will allow foreign investors to take part in privatizations," Nabiullina said, adding that the government would also ask Russian and foreign banks to act as consultants. She said some stakes in state companies could be fully sold on the open market, while some could go to strategic investors.

The sales, if carried out, would be Russia's most ambitious since President Boris Yeltsin's era, when well-connected tycoons snapped up some of the biggest oil and metals firms at low prices.

Investors have applauded the plan to sell minority stakes in major state firms but have said they are keen to see how transparent the process will be.

The extra revenue would help the Kremlin plug budget holes ahead of a 2012 presidential election which will encourage the authorities to maintain high vote-winning social spending.

Government officials have said sales could include minority stakes in firms such as Russia's biggest oil producer Rosneft, lender VTB and oil pipeline monopoly Transneft.

The plan ensures Russia will keep control of the firms in a clear signal the Kremlin is not parting from the resource nationalism it has developed over the past decade of high commodity prices.

(Reporting by Gleb Bryanski, writing by Dmitry Zhdannikov, Editing by Patrick Graham)