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Finland blazes the privatization trail

Selling state assets to foreign investors raises popular opposition throughout the region, but privatization is likely to remain the main source of Nordic equity offerings

Barring a sudden rush of disposals by the Wallenberg family, the biggest story in the Nordic capital markets this year is likely to be the Finnish privatization programme. Over Fmk20 billion ($3.6 billion) of assets are scheduled for sale in 1998. They include Neste and IVO, the state-owned oil and power companies which were merged earlier this year, Telecom Finland, Postipannki, the state-owned bank, as well as residual government stakes in Enso, the forestry group, and Helsingen Puhelin, the Helsinki Telephone company which was partially privatized last year.

As elsewhere in the world, competition for mandates has been fierce. Earlier this year, Morgan Stanley and SBC Warburg were chosen to lead (and value) the IVO/Neste transaction. With the company's market value estimated at Fmk20 billion, the IPO Ð of 30% of the share capital - could bigger than Fmk5 billion, making it the largest of the deals this year. SBC is also likely to be involved in the Enso sale thanks to its merger with UBS, the forestry company's nominated adviser. Merrill Lynch and MeritaNordbanken have the mandate to arrange the Telecom Finland sale. But Postipannki has yet to choose an adviser.

The selection of so few Nordic banks has been criticized by local players.

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