Russia lines up state assets for privatisation

Russia is lining up seven state companies, including airline Aeroflot, for potential privatisation.

Kremlin spokesman Dmitry Peskov said the list of companies to be privatised and the size of the stakes were yet to be finalised.

But he said that foreign investors would be welcome to buy shares in the sale.

The potential sell-off is expected to raise in the region of 500 to 800bn roubles($6.5bn; £4.5bn).

The firms that could be privatised are :

• airline Aeroflot

• oil company Bashneft

• oil company Rosneft

• Shipping firm Sovkomflot

• diamond miner Alrosa

• State bank VTB

• Russian railways

The heads of seven state owned businesses were invited to the Kremlin by President Putin to discuss the possible privatisation plans.

The list is still under discussion and it's believed the sale could take place in the second half of this year.

'Desperate and high risk'

The fall in oil prices has left a large shortfall in the country's income and there are worries this could force Russia into a second year of recession.

The country has relied on oil and gas revenues for more than half of its budget until 2014, but the drastic fall in oil prices has dented this income drastically.

President Putin is said to have told the business leaders that the state should hold onto strategic companies.

Brenda Kelly, market head analyst at London Capital group said she thought there would be little take up from these privatisations: "It all looks a bit desperate and high risk."

Russia has a controversial history with privatisations.

In the 1990s when many state assets were sold they ended up in the hands of a few creating the country's vastly wealthy oligarch class.

Those fears haven't gone away.

Natalia V. Akindinova, Director at Centre of Development Institute of Higher School of Economics in Moscow said: "This is not a very good time [for privatisation] from the point of view of government revenue, because all prices are at the minimum levels.

"There are certain risks that this will be privatisation among one's own people again".