Iran's government has sold an 18 per cent stake in Iran Khodro, the Middle East's biggest carmaker, for the equivalent of about $430 million, said a senior Tehran Stock Exchange official.

The offering by Privatisation Organisation was one of the largest on the bourse and the biggest in Iran's auto industry, vice-president Mohammad Reza Rostami told Reuters.

Iran Khodro, which also makes trucks, has a joint venture with France's Renault to make the no-frills Logan, sold in Iran as Tondar-90 and Peugeot's 206 and 405 models.

Rostami said the stake was bought by a consortium of Iranian investors, including Iran Khodro employees, investment firms and pension funds. About 20pc of the purchase price was paid in cash, and the rest would be paid in instalments over four years.

'There was a lot of interest ... several brokers and customers were competing,' he said, adding the government still held 20pc of the company, listed on the bourse for almost 10 years.

Iran, under tightening sanctions from the UN and the US over its disputed nuclear programme, aims to speed up the sale of state assets to attract new capital and help boost the oil-dependent economy. Earlier this year, an official said Iran planned to raise about $12.5 billion by privatising more than 500 firms during 2010-11.