Peter Priisalm, head of investments at Avaron, told ERR that as far as listed companies Enefit Green and Tallinna Sadam are concerned, selling shares should not be a problem.

"In the long term, more liquidity would be good for these stocks, though in the short term it could put pressure on prices, because when supply increases overnight, the price usually gives way," he said.

Regarding the four state-owned companies that are being considered for sale – Teede Tehnokeskus (Technical Center of Estonian Roads), Operail, Nordic Aviation Group, Transpordi Varahaldus (TVH) – Priisalm said that there are certainly companies on the list that market participants may be interested in, but the most interesting is Transpordi Varahaldus (TVH), an investment company focusing in fixed assets in the transport sector (e.g., aircraft).

"I think there is a lot of demand for planes in the market today because of the long delivery times. I can't tell you what the country's strategic plan is for them. But I think they could be sold if there are no cumbersome contracts or anything like that," Priisalm said.

The other three, Priisalm said, are too small to be listed and are more likely to be of interest to companies operating in the same segment or looking to enter it.

"I think they will find a buyer. I can't say today at what price level. I looked at the annual reports of the companies, some of them were in the red, not very profitable. Maybe a private company or a private owner will be able to run certain businesses more efficiently," he said.

Olavi Lepp, head of Swedbank Estonia, said on Vikerradio that there is interest in every company, but for some of them the question is what will be sold, referring to Nordea and Operail.

Viljar Arakas, chairman of Eften Capital, said that in the case of Nordica, its licenses could be of interest to potential buyers, and in the case of TVH, the interest could be in airplanes. He remained hesitant about Operail.

"There is certainly interest, especially for companies that are going public. As for Operail, Nordea and TVH, it is difficult to say, because it is a specific situation, the circle of buyers is very, very narrow. But the number of buyers would certainly not be less than one," he said.

Commenting on the timing of the privatization decision, Priisalm said that even if the geopolitical situation got better foreign investor interest in these enterprises would probably be low.

"Local companies will be interested if they see potential to increase their market share," he added.

Arakas said that investment from outside Estonia could come from the EBRD or the European Investment Bank. Pension funds may also be interested, and not just from Estonia.

In addition to the seven companies, the government is considering privatising two more, Eesti Loto and Eesti Post. Priisalm said that these are the kind of companies that more investors might be interested in. "This could be something interesting for stock market investors," he said.

Arakas praised the government's action, describing it as an unprecedented privatization initiative since the privatization agency was shut down in 2001. "It is the right decision for the state to reduce its role in the economy and allow the free market to flourish," he said.

Details of privatization still to be finalized

Teede Tehnokeskus (Technical Center of Estonian Roads), Operail, Nordic Aviation Group, and TVH will all be sold, with the state's stake in AS Tallinna Sadam reduced to 51 percent. In addition, the Ministry of Finance proposes partially privatizing two Eesti Energia companies, Enefit and Enefit Green.

The 2022 auction for Teede Tehnokeskus, which had a starting price of €3.9 million, was unsuccessful. Finance Minister Mart Võrklaev (Reform) told ERR on Friday that the climate minister will present a plan to sell the company in September.

Speaking about Operail, a railway logistics company, Võrklaev said that "the company owns certain assets and also so-called know-how."

No date has been set for the privatization of Operail. "An analysis of the strategic needs, i.e. the country's own transportation needs, still needs to be carried out," the minister said.

Võrklaev said that the state is preparing to lower its stake in Tallinn Port to 51 percent. The climate minister will offer a proposal to the government in September as well.

The revenues from the IPOs of Eesti Energia's two subsidiaries will stay within the group. Võrklaev emphasized that the timing of the IPOs makes it doubtful whether Eesti Energia would be able to use the revenues to build the planned gas plant.

"We need to make these decisions and possible additional investment faster, and this is what Eesti Energia is working on," he said.

Enefit Green's IPO could take place as early as the end of this year, although the timing should take into account the company's present low share price. Võrklaev announced plans to sell 10 percent of the company, in addition to the current 22.83 percent stake.

In addition, the government is considering privatizing Eesti Post, but the question is what will happen to the postal services. "This is what the Ministry of Regional Affairs and Agriculture is working on. The next step will be to decide whether, how and to what extent the company should be dismantled," Võrklaev said.

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