80% of Iranian Bank Mellat to be sold

by Richard Kilner

Story link: 80% of Iranian Bank Mellat to be sold

Over the upcoming months shares in Bank Mellat, the second largest in Iran, will be floated.

It will be the first Iranian state-owned bank to be privatised, in accordance with a government plan to lessen state ownership.

The bank’s managing director, Ali Divandari, has told reporters it is likely to begin with about 5% of shares being quoted in March of next year.

Divandari went on to say that talks had been held with foreign investors, many of whom had expressed an interest.

The plan to reduce state ownership was announced last year by the country’s supreme leader, Ayatollah Ali Khamenei. Under the scheme, approximately 80% of the state’s stakes in various banking, media, transportation and mineral sector firms would be sold off.

The companies being floated in this manner will do so on the Tehran stock exchange.

The base share price will be decided by the Privatisation Organisation, and shares will be available for purchase to foreign buyers in addition to domestic investors.

The scheme will take place over three to four years, and is in accordance with Article 44 of the Iranian constitution, which refers to private sector involvement in industry, agriculture and services.

At present the state is involved in over 75% of the country’s economy.

Last year Bank Mellat was hit by US sanctions following its provision of banking services to nuclear related firms.

In addition to that, the US has been pressuring Europe and Asia to follow suit and sever financial links between their banks and Iran.

However, Divandari has stated that Bank Mellat has suffered no real difficulties following the sanctions, saying that the firm cut its link to the dollar last year.