Sweet start as Russia goes private

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MOSCOW (Reuter) - The Bolshevik sweet factory, named after the Communists who swept away free enterprise after the 1917 October Revolution, yesterday was the first big firm to be sold off in Russia's privatisation campaign.

By mid-morning on the first day of a two-week tender, a short queue of eager buyers had formed behind a row of plain white booths offering advice to people wanting to swap privatisation cheques for shares in the Moscow factory. 'I do not think we can lose. It is a good factory and there is always going to be a big demand for sweets,' said a retired seamstress, Anna Balashova.

The tender marks the first large-scale use of the cheques which Russia issued free in October to launch privatisation. The cheques, with a face value of 10,000 roubles, are still trading below par in street markets and on Russia's tiny stock exchanges.

The Bolshevik factory, founded as a private company in 1855, can produce 2,500 tons of cakes and biscuits a day. It was picked for the pilot privatisation scheme by Western advisers who examined offers from some 40 firms.

'The Bolshevik factory was suitable because it was one of just 11 firms in Moscow which had completed its privatisation plan,' said Stephen Jennings of Credit- Suisse First Boston, which is advising the Russian government on the sell-off.

Some 18,000 shares in the factory are available - 44 per cent of the total. Workers have taken their full allocation of 56 per cent and some attended the auction to try to bid for more.

A document giving data on the Bolshevik factory said the firm had assets of 503m roubles ( pounds 750,000) and liabilities of 416m roubles. But it added the warning: 'The figures are prepared according to Russian accounting regulations, which are different to those accepted elsewhere in the world.'