Reuters: Iran has sold the remaining 315 million shares in Bank Mellat which did not find buyers when a 5 percent stake in the country's second-largest bank was offered to investors last week, a stock market official said on Sunday.
TEHRAN, Feb 22 (Reuters) – Iran has sold the remaining 315 million shares in Bank Mellat which did not find buyers when a 5 percent stake in the country's second-largest bank was offered to investors last week, a stock market official said on Sunday.
About 340 million, or 52 percent, of the 655 million Bank Mellat shares on offer were sold when the bank was floated on Feb. 18 in the Islamic Republic's first part-privatisation of a state bank.
It took place despite a fall of over 30 percent for the Iranian stock market since August, in line with tumbling oil prices, and one official suggested the share price had been set too high. Iran is the world's fourth-largest crude producer.
But a Tehran Stock Exchange official said the remaining shares were sold on Saturday, meaning that the entire 5 percent stake had now been floated.
"They sold all 655 million (shares) in two phases," the official, who declined to be named, told Reuters. He said the average price was 1,050 rials per share (around 11 U.S. cents).
He cited information from the stock exchange and Iran's privatisation organisation saying about half of the 655 million shares were bought by private retail investors and the rest by institutional investors such as pension and other funds.
With foreign investors wary of Iran because of its nuclear row with the West, some analysts say firms to be sold off may simply end up being transferred within the country's vast public sector.
Iran's economy is dominated by the state but the government has been seeking to speed up privatisations after the constitution was changed to encourage the sale of assets.
Bank Mellat, which expects to make a profit of $200 million in the 2008-09 year, is among the Iranian firms subject to U.S. sanctions imposed because of what the West says is Iran's bid to build nuclear bombs. Iran says its atomic programme is peaceful.
Bank Mellat Managing Director Ali Divandari last week told Reuters the offering of a 5 percent stake was the first step in a process to gradually reduce government ownership in Iran's second-largest bank after state-owned Bank Melli.
Another 10 percent will be offered by the government in coming months, the Tehran Stock Exchange said on Saturday. (Reporting by Fredrik Dahl; Editing by Erica Billingham)