Strong support for public share offerings

  • 2005-03-02
  • From wire reports
TALLINN - Gert Tiivas, chairman of the Tallinn Stock Exchange board, has said that now is the appropriate time to conduct public share offerings in state-owned companies, adding that listing the Port of Tallinn and Eesti Energia was a good idea.

"All the logical arguments are in favor," Tiivas said.

Among such arguments was a proposal to offer new investment opportunities to the rapidly growing pension funds.

"Foreign money and money from our own country keep coming onto the market. Demand very clearly surpasses supply. It's difficult to think of a more favorable moment," Tiivas said.

He added that the market had sufficient liquidity and that a number of IPOs of various size could be carried out within a year.

Another argument in favor would be that, by selling minority shares in a public offering, the state could obtain a clear picture of the value of its corporate assets.

According to Tiivas, there was no reason to fear that the partial sell-off of state-owned companies would become "privatization through the back door."

"The state and its leaders have learned rather good lessons from privatizations, which, in the meantime, didn't succeed in the best manner," he said.

By selling minority shares, the state would retain control over the companies both as a regulator and core owner, Tiivas said. At the same time the companies would have a broad circle of shareholders.

Tiivas recommended the decision in favor of IPOs. He added, however, that politicians could feel certain "sensitivies" when remembering some earlier privatization cases.

"It is difficult to offer any rational argument against the arranging," Tiivas concluded.