June 20, 2025
For the umpteenth time, the government has canceled plans to sell stock in Iran’s two biggest automotive firms, Iran Khodro and Saipa, as a giant part of the national privatization program.
Even before the revolution, the government in the 1970s announced plans to privatize much of the two firms. Nothing happened before the revolution arrived and the new regime liked the idea of state ownership.
But, by the 1990s, even the revolutionary government decided government ownership was a poor idea and announced it would be selling off 42 percent of the shares in the two companies. The shares in each company would be sold as a block, so potential individual small shareholders would not benefit, only the very wealthy. However, critics charged the stock was being undervalued and the sale was halted while the detailed plans were revised.
This has happened multiple times. Then, three years ago, President Raisi gave the government a six-month deadline to sell the shares in the firms. Six months passed and the plans were still being worked on.
Eventually, however, nine bidders expressed an interest in the stock, and the government has been negotiating with those nine prospective buyers.
On May 25, however, the Supreme Council for Economic Coordination announced it was suspending action on the stock sales until further notice. It seems the council is concerned that the price of the stock being offered does not reflect the real value of the two firms.
This is a faux stage play that has now been running for decades. But unlike a real stage play, this one doesn’t mean ever increasing sales of tickets and consequent rising revenues.