Venezuela plans stock sale in break from socialist model

CARACAS

Venezuela’s government is seeking private investors to pump funds into vital but crippled state-run companies, decades after seizing them in the name of socialism.

The government today intends to offer 5 percent to 10 percent stakes in companies ranging from telephone and internet service providers to a petrochemical producer. In another country, those industries might be attractive targets for investors, but questions remain as to who would be willing or able to take a minority position in the Venezuelan companies that have suffered from years of neglect and mismanagement.

Adding to the mystery is lack of details provided by the government about the sale, including what price it is seeking for shares in the companies and on what stock market they might be listed. Some are speculating the move could be a first step toward returning the companies to private hands.

“We need capital for the development of all public companies,’’ Maduro said during a televised event last week. ``We need technology. We need new markets, and we are going to move forward.’’

It’s a marked departure from Maduro’s predecessor, the late President Hugo Chavez, who nationalized many companies in his bid to transform the South American country into a socialist state. Among the companies Maduro mentioned are CANTV and its subsidiary Movilnet, petrochemical producer Petroquimica de Venezuela and a conglomerate focused in the mining sector.

Interest, however, may be limited to investors with ties to the government or those with an appetite for risk.

The country is still under economic sanctions imposed by the U.S. and other countries that prevent investors from being able to funnel money to Venezuela’s state-owned companies. And the percentages Maduro announced would not give private investors decision-making powers to undertake much-needed changes within the corporations.

Days-long power outages are common across the country. Millions of households either do not have access to water or the service is intermittent. Internet and phone services are deficient.