SSO to Buy Gov’t Shares in Lieu of $3 Billion Debt
EghtesadOnline: The government plans to swap 890 trillion rials ($3.1 billion) of its unpaid debt to the Social Security Organization with shares, the SSO caretaker said.
In a talk with Fars News Agency, Mirhashem Mousavi estimated government debt to the SSO in the range of 3,000 trillion rials ($10.7b).
The SSO is the biggest insurance company in Iran that offers insurance to private sector workers as well as voluntary coverage to the self-employed and more importantly pays billions in pension every month.
“We will acquire government shares in several companies for the 890-trillion-rial unpaid debt,” he was quoted saying.
Government arrears to the SSO keep on rising due to its failure to pay its share of insurance premium plus other financial obligation under the law.
A non-government organization, the SSO is largely funded by insurance premium contributions (7% by employees, 20-23% by the employer and 3% by the government).
Most governments in the past never paid their full share. An estimated 50 million Iranians are under SSO cover.
The SSO owns several major industries and companies and over the years has emerged as an economic conglomerate with immense power and influence. It once was the richest and most powerful organization in Iran.
The rising number of retirees and shrinking revenue from investments are making a bad situation worse for the giant organization on which a large segment of the society depends.
In recent years the SSO has been forced to sell some of its assets to remain afloat and pay the army of retirees whoe numbers grow on a regular basis.
In April 2020, the SSO sold 10% of its stakes in the Social Security Investment Company, its own investment arm known as Shasta, in an initial public offering.
Shasta generated 69 trillion rials ($246 million) from the IPO. The company later sold more shares in the secondary market when the stock market was at its nadir from March to Sep 2022).
Mousavi said the giant company contributes 7% of the SSO’s finances and there are plans to double it gradually “by listing its 60 subsidiaries in the bourse.
The multidisciplinary company has shares in a wide range of sectors, including petroleum, petrochemicals, pharmaceuticals, cement, transportation, telecom, shipping and finance companies that in turn manage 187subsidiaries.