The Kremlin is putting a state-owned company up for sale. He's looking for money for the war
This rapid privatization is the result of the country's disastrous financial situation. After only four months of the year, there is a huge hole in the Russian budget, which has already drastically exceeded the deficit planned for the entire 12 months.
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Last Friday, the Federal Agency for State Asset Management officially announced the selection of the manager whose task it will be liquidation 23.76 percent Aeroflot shares.
The company, which serves over 50 million passengers a year, will be partially privatized on the Moscow Stock Exchange. Currently, the Kremlin controls 73.8 percent. shares, which means that almost one third of the state package goes under the hammer.
Billions from the stock market for war money
The valuation of the transaction shows the scale of Russian desperation. As calculated by The Moscow Times, citing data from the trading floor in Moscow, the state may obtain almost 45 billion rubles (approximately PLN 2.28 billion) from the sale. The total market capitalization of airlines at the close of trading on May 22 was 187 billion rubles ($2.6 billion).
All these funds are intended to immediately contribute to the federal budget. Russia's financial situation is dramatic – the deficit has already reached an unimaginable level of 5.8 trillion rubles (PLN 290 billion). In practice, this means that at the end of April the real budget gap was over 1.5 times larger than assumed by the Kremlin's official plans.
Oil will not save the Kremlin, the economy is slowing down sharply
Although Moscow is counting on a temporary cash injection in the coming months due to high oil prices, experts warn that this drip may be cut off. A possible calming of the situation in the Middle East and unblocking the Strait of Hormuz will lead to a decline in commodity prices.
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However, the real problem of Russian finances, dominated by gigantic military spending, is the collapse in sectors not related to oil and gas, where tax revenues are disappearing before our eyes.
The Kremlin's official forecasts also had to collide with reality. In May, the Russian government revised its plans and lowered its GDP growth forecast for this year by as much as one third – to just 0.4 percent. Independent experts have no illusions and predict complete stagnation.
According to economist Dmitry Polevoy, quoted by Reuters, this means a massive reduction in revenues and a shortage of income from activities other than the export of oil and gas.
The analyst calculates that by 2027, due to the slowdown in the economy, the Russian budget may lose from 1.3 to 1.8 trillion rubles compared to the assumptions.. In order to maintain financing for the aggression in Ukraine that is now in its fifth year, Putin faces a brick wall: he must either drastically cut social spending, which is slowly happening, or sell off more national family silver. The sale of Aeroflot is just the beginning of this avalanche.
