Russia mulls raising dividends of state companies to 50%

Bloomberg

Russia is nearing a decision to double dividends paid by state-owned companies on last year’s profit as the government struggles to cover a widening budget deficit, according to an official at the Federal Property Management Agency.
A draft decree on the proposal to raise the payout to a minimum of 50 percent of net income from 25 percent has been submitted to the cabinet, the official said, asking not to be identified as the document hasn’t been signed yet. The proposal covers all state companies including Gazprom PJSC, Aeroflot PJSC, Russian Railways OJSC, VTB Group, Alrosa PJSC, Bashneft PJSC and Rosneftegaz OJSC, which holds a majority stake in Rosneft OJSC.
Russia, the world’s largest energy exporter, has been battling a decline in budget revenue as oil and gas prices plunged. With sanctions over the Ukraine conflict limiting its access to global financial markets, the government is seeking new ways to bridge the gap, which reached a five-year high last year. It has targeted the oil industry with tax increases and is now looking to raise more than the 140.5 billion rubles ($2.1 billion) it originally planned to reap from state-company dividends this year.
The Finance Ministry in Moscow is sticking to its target of holding this year’s budget deficit at no more than 3 percent of gross domestic product with an average oil price of $40 a barrel. The 2016 budget was approved last year based on an average oil price of $50. Brent, used to price Russia’s main Urals export blend, traded at $39.24 on Tuesday, the lowest in more than a month.