March 12, 2013 / 3:36 PM / 5 years ago

Russia state asset sales to resume in H2 -FinMin

* To sell stake in Rosneft, cut stake in VTB

* Extra government spending of 500 billion roubles in 2013

* Details of privatisation lacking

By Lidia Kelly

GORKI, Russia, March 12 (Reuters) - Russia will resume selling stakes in state firms in the second half of the year, Finance Minister Anton Siluanov said on Tuesday, indicating possible slippage in the government’s ambitious privatisation programme.

Selling off state assets has been a long and bumpy process, and with an expected 2013 budget deficit of below 1 percent of gross domestic product and low levels of sovereign debt, Russia has no pressure to put its prime assets on the block.

Siluanov, speaking at a cabinet meeting, avoided specifics in comments that raised questions over Prime Minister Dmitry Medvedev’s commitment to moving forward before the year ends on a string of deals on the docket for 2013.

“We have not looked into the timing, but I think that, one way or another, (privatisation) will start in the second half of the year,” Siluanov said. “These are questions about the details.”

The state raised more than $5 billion from the sale of shares in Sberbank last autumn, but an offering of new shares by state-controlled competitor VTB penciled in for this year is struggling to attract interest.

Among the few deals likely to progress are the proposed float of diamond miner Alrosa, and the public offering or strategic sale of a 20 percent stake in the Novorossiisk Commercial Sea Port on the Black Sea.

The Finance Ministry is looking for extra revenues to cover additional state spending this year already envisaged at around 500 billion roubles ($16.3 billion), according to Siluanov.

In the 2013 budget, the government envisaged that 427 billion roubles raised from privatisation would be spent on financing the deficit, Siluanov added, expected at 0.8 percent this year.

While high prices for oil - Russia’s chief export - finance a big chunk of state spending and assure a nearly balanced budget, earnings from crude cannot be used for ad hoc spending under a fiscal rule adopted last year.

The government has so far approved a plan that would raise between 206 billion and 224 billion roubles this year from privatisation, according to news agency Interfax, with nearly 150 billion roubles to come from selling 5.66 percent of the oil major Rosneft.

Exactly how the sale is likely to go through is unclear as Rosneft CEO Igor Sechin, an ally of President Vladimir Putin, has consistently lobbied against its privatisation.

Instead, Sechin is pursuing a strategy to build up Rosneft as a Kremlin-controlled national champion through the $55 billion takeover of TNK-BP, to be completed in days, that will create the world’s largest listed oil firm by output.

$1 = 30.7365 Russian roubles Reporting by Daria Korsunskaya; Writing by Lidia Kelly; Editing by Douglas Busvine, John Stonestreet

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