BY VADIM REZNICHENKO, HEAD OF PRACTICE, A.T.LEGAL

The Ministry of Finance has begun discussing the privatization of the National Payment Card System, the Mir card operator and the System of Quick Payments. The Bank of Russia, which owns 100% of the operator, is not planning any changes in the shareholder structure. Meanwhile, financial market participants believe that the company can expect a successful public offering.

The Ministry of Finance is discussing with the financial market the possibility of privatizing the National Payment Card System (NPCS). The operator of Mir cards was established to protect card payments in Russia from sanctions in 2014. According to Kommersant, there is no discussion of privatization with the Central Bank, which owns 100%, and there are no plans to change the shareholders.

The Ministry of Finance and financial market specialists say that the time for privatization of NPCS has come, and the company can count on a successful public offering. The Ministry of Finance is currently working on the concept, and some Ministry sources said that there are few specifics so far, but there is an understanding in principle that it should be done. The press service of the Federal Antimonopoly Service (FAS) noted that they were not involved in the discussion of the NPCS privatization. They stressed that the issue of possible options for privatization "requires careful study, taking into account all possible risks."

he newspaper respondents noted that the Ministry of Finance is discussing the idea of NPCS privatization with financial market participants, rather than at the interdepartmental level. "There are two main ideas - to transfer 50% plus 1 share of NSPC from the Central Bank to the government and divide the rest among systemically important participants of the payment market", - said one of the sources. However, the preferred option for the Ministry of Finance is privatization of 100% of the company during IPO. Experts note that NPCS privatization will remove the conflict of interest.

The initial public offering (IPO) of the NPCS is possible, experts agree. Investments in the NPCS at present are risky in any case due to the reputational costs resulting from tensions in interstate relations, warned Vadim Reznichenko, Head of Practice, A.T.Legal.

"Investments in the NPCS are currently risky in any case not from the perspective of the net return on assets, but due to the reputational costs caused by tensions in inter-state relations. The investor should understand that if he invests money in the NPCS, he will be indirectly involved in the functioning of the Russian financial system in Crimea. This may cause discontent on the part of the Western business community and, as a consequence, sanctions in relation to foreign business areas of investors.

At the same time, the option of a public offering of NPCS JSC shares does not look unrealizable, as there is always a possibility of offering on the Russian stock exchange. Moreover, after 2014 the shares of the leading Russian companies continue to be traded on the world's leading stock exchanges. Investing in domestic securities has always been a rather risky instrument of investing money, unless we are talking about "blue chips". Shareholders themselves have to assess the capitalization prospects of the companies they choose, it is not possible to shift their own investment risk onto someone else. In its turn, the shareholders' legislation of this or that jurisdiction provide a certain set of guarantees to all shareholders. During public offerings, the Central Bank of Russia may, among other things, set forth in the prospectus the risks associated with the acquisition of shares, which, to some extent, will act as a restriction for investors. It is important to maintain reasonable boundaries, since the essence of a public offering is to offer shares to an uncertain circle of people,” - said the lawyer.

You can find more details here: https://www.forbes.ru/newsroom/finansy-i-investicii/437025-kommersant-uznal-ob-obsuzhdenii-minfinom-privatizacii-operatora