UPDATE 2-Russia says privatisation on track, but no opportunity for sale yet

Mon Jun 9, 2014 12:49pm EDT

(Recasts with comment from First Deputy Prime Minister's office)

By Ludmila Danilova and Vladimir Soldatkin

MOSCOW, June 9 (Reuters) - Russia has denied changing its privatisation plans after a report on Monday of delays to the programme, though a spokesman for the office of First Deputy Prime Minister Igor Shuvalov acknowledged the business environment for state selloffs remains tough.

The spokesman's comments came in response to a report quoting a government minister saying Russia was putting off the privatisation of three companies which had been planned for this year, in what would be the latest delay to a programme hampered by economic uncertainty linked to the Ukraine crisis.

The plans for the year involved the sale of shares in Rostelecom, shipping company Sovkomflot and sea port Novorossiisk.

"Nothing has changed in the plans and principles of privatisation," the spokesman said. "We will privatise these and other companies only when there is an appropriate economic environment. There has been no such an environment.

"When a decent buyer with a decent price emerges, we will sell the companies this year or next."

The government has said it hopes to raise 200 billion roubles ($5.8 billion) by selling stakes in state companies this year. However, Deputy Finance Minister Tatyana Nesterenko was quoted as saying the proceeds could be less than envisaged.

"We expect a significant decline in revenues from privatisation, to 170.8 billion roubles ($5 billion)," RIA news agency quoted her as saying.

Later, the finance ministry said on Twitter that the state budget is likely to get proceeds from the sale of the three companies not earlier than 2015.

UNCERTAIN VALUE

Russia's privatisation plans have been hit by a fall in the dollar-denominated RTS share index, down about 5 percent on the year, and weakness in the rouble, down 4.3 percent, reflecting Western sanctions over Russia's annexation of Crimea.

"We checked the estimate for the planned sale of shares in Rostelecom, Sovkomflot and the Novorossiisk sea port. Based on the uncertain value, the government decided not to sell these shares this year," RIA quoted Nesterenko as saying.

Launched in 2010 by the then finance minister Alexei Kudrin, the privatisation drive aims to reduce the state's direct role in the economy and improve a much-criticised investment climate.

But it has been dogged by delays.

Assets have been removed from the lists, prey to a tug-of-war between more liberal-minded politicians and hardliners favouring a slower approach to privatisation. Market volatility has been exacerbated by the crisis over Ukraine, where pro-Russian separatists and government forces are fighting in the east.

Russia's state property management agency has said the state may sell stakes in airline Aeroflot and oil major Rosneft, but the latter faces objections from its CEO Igor Sechin.

($1 = 34.2725 Russian Roubles) (Writing by Elizabeth Piper and Vladimir Soldatkin; Editing by Mark Trevelyan and David Holmes)