CARACAS — Venezuela’s main state-owned bank announced on Wednesday it will offer up to 10% of its capital in the local stock market, after President Nicolas Maduro allowed the partial opening of public companies to raise funds.
As part of the economic policy shift to relax controls, Maduro said on May 11 that between 5% and 10% of the shares of state-owned industries like telephone companies and mixed oil companies would be opened to national and foreign investors.
Caracas-based Banco de Venezuela, which was nationalized by the government in 2009 and sanctioned by the United States in 2019, said in a statement it will initiate a public offering of 5% to 10% of its share capital.
The bank added it is “taking the first step among public companies to make it possible for citizens and private, national and international economic players to participate in the stock market,” according to the statement published on its Twitter account.
The bank, which has around 15 million customers, did not specify when the offer and the procedures for acquiring the shares will begin.
The entity “must present a schedule detailing the dates and steps to be followed,” said Gustavo Pulido, president of the Caracas Stock Exchange, who added that the announcement is a sign that the economy “has started to free up.”
In 2021 Maduro began to reverse the socialist economic model of his predecessor, Hugo Chavez, by handing over the management of some 13 state-owned food companies to third parties in exchange for payments in order to lower public spending.
In 2007, Chavez launched a wave of nationalizations, backed by high oil revenue, of companies in sectors considered “strategic” like food, banking, manufacturing, oil, electricity, construction and communications. But under state control these industries reduced their production levels due to disinvestment, corruption and lack of inputs.
The government takeover of electricity and telephone companies also had a severe impact on the local stock market, because part of the shares of these companies were traded on the market. (Reporting by Mayela Armas in Caracas Writing by Steven Grattan Editing by Matthew Lewis)