September 18, 2008 / 4:07 PM / 12 years ago

REFILE-UPDATE 1-Russia to spend up to $20 bln on share buybacks

(Corrects link to related story in second paragraph) (Adds Kudrin quotes, details)

MOSCOW, Sept 18 (Reuters) - Russia’s government may spend up to 500 billion roubles ($19.7 billion) on share buybacks including those of state firms if markets do not stabilise, RIA news agency quoted Finance Minister Alexei Kudrin as saying on Thursday.

The move is part of a package of government measures aimed at stabilising the markets announced earlier at a meeting of President Dmitry Medvedev with government officials and bankers. [ID:nLI364380]

Kudrin also told state television channel Vesti-24 the government had postponed a decision on cutting the value added tax (VAT) rate until 2009 but would decide on new tax breaks for the oil industry in the near future.

Kudrin was quoted by RIA as saying the government will initiate the buybacks if Russian companies remain undervalued for a long time and added that the government expected to make a profit on such investments.

“The situation is such that the price for securities of large respected companies including those with the state’s participation fell to such levels that it no longer corresponds to reality,” Kudrin was quoted as saying.

Kudrin said the government will initially spend one half of the amount and will tap the other half only if necessary. He said the government expected the investment to increase the value of the enterprises. (Writing by Gleb Bryanski; Editing by David Holmes)

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