Putin prepares to court foreign investors wary of past stumbles – Bloomberg

On the surface, an opportunity to buy into such firms as the country's largest oil producer Rosneft OJSC and rail monopoly Russian Railways JSC would seem almost too good to be true. Potential buyers see many obstacles that could prevent any deals from happening, not the least of which include Russia's track record in mismanaged sales and the uncertain role of the state in new ownership structures, according to Bloomberg.

"I will believe it when I see it," said Pavel Laberko, a London-based money manager at Union Bancaire Privee, a wealth manager that oversees about $90 billion. "The government has been talking about privatization for several years, but they always find an excuse not to do it. I see a high probability of this not happening."

A deepening recession, a ballooning budget deficit and Brent crude at around $30 a barrel have weakened the oil-reliant economy and forced Putin, who has tightened his grip on the state, to mull privatization.

Any interest in privatization assets would likely come from countries such as China and possibly from some Russian oligarchs, according to George Hoguet of State Street Global Advisors.

Read alsoRussian Economy Ministry to prepare proposals for Sberbank, VTB privatization The privatization program is a contentious topic given that Russia's most prized assets wound up in the hands of oligarchs in the 1990s at bargain prices following the collapse of the Soviet Union, turning them into billionaires almost overnight. 

Read also"We have lost": Sberbank of Russia's CEO calls Russia "downshifter state"The Russian state budget's in a "critical" situation and, given the global turbulence in financial markets, there's no use waiting for more favorable conditions, Economy Minister Alexei Ulyukayev said at a meeting on Tuesday. The ministry said the government is considering broadening the list of major enterprises to be privatized in 2016.