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Trade Sales: This Together With Joint Ventures Represent The Most Widely Used Method of Privatisation in

This document outlines several methods of privatization that are commonly used in countries without developed capital markets. The most widely used methods are trade sales, which involve selling shares or assets to other companies through direct negotiation, tender, or auction, and joint ventures, which combine partial trade sales and management contracts bringing in a partner with relevant expertise. Other methods discussed include public share offers, public auctions, private placements, buyouts by management/employees, and privatization funds.

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Manish Ravat
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23 views

Trade Sales: This Together With Joint Ventures Represent The Most Widely Used Method of Privatisation in

This document outlines several methods of privatization that are commonly used in countries without developed capital markets. The most widely used methods are trade sales, which involve selling shares or assets to other companies through direct negotiation, tender, or auction, and joint ventures, which combine partial trade sales and management contracts bringing in a partner with relevant expertise. Other methods discussed include public share offers, public auctions, private placements, buyouts by management/employees, and privatization funds.

Uploaded by

Manish Ravat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Trade sales: This together with joint ventures represent the most widely used method of privatisation in

countries without developed capital markets. These may be sales of shares or of assets to another
company, and can be carried out by direct negotiation, tender or auction.

Joint ventures: These combine components of other methods, typically partial trade sale and
management contracts. A joint venture partner would be expected to bring significant expertise in
production, marketing, management and the capacity to expand the business.

Public share offers: While shares can be sold without a stock market, the latter is important both
to tap savings and to provide buyers with liquidity.

Public Auction: This provides a quick mechanism for the rapid privatisation of small enterprises.
Sales are usually of assets rather than shares.

Private placement, typically with institutional investors, by negotiation.

Buyouts by management and/or employees.

Privatisation funds as purchase vehicles for wider share ownership.

Liquidation for highly indebted hopeless cases.

Where methods involving sale of shares or assets are not feasible, alternative options could be
considered that do not involve a change in ownership. These options would be relevant in selected cases
only, and could include:

Lease contracts, with or without a purchase option.

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