A debt crisis, recession, plunging stock markets and a soccer scandal are not the best conditions in which to sell a stake in Europe's biggest betting company.
But that is what cash-strapped Greece faces as it prepares to sell OPAP, the most valuable asset on the government's privatisation list this year.
Greece must sell 50 billion euros ($73 billion) worth of assets by 2015, starting with 5 billion in 2011. This is a condition for a second European Union/International Monetary Fund bailout for the debt-laden country, after a 110 billion euro rescue last year.
Many bankers say the plan is far too ambitious and fear it will fail while a few say pressure from Greece's lenders and E.U. lawmakers w ill force the government to achieve its goal.
'I only wish the 50 billion euros was a legitimate target, but in this timeline, no way,' said an investment banker involved in the plan, who declined to be named. 'It is a pipe dream ... you can't make M&A happen just like that,' he said.
OPAP will be the first big test of Greece's forced asset sales and the government is hoping investors will be tempted, despite the country's problems.
Unlike most of the assets earmarked for sale, OPAP is debt-free, profitable and has no strong labour unions.
The state's 34 per cent stake in the company has a market value of about 1.17 billion euros.
Unlike most other Greek public firms, OPAP has a lean workforce and generates annual profit of about 600 million euros. 'This makes it easier to sell than any other state company,' said a local investment banker who advises Greece on asset sales.
But even OPAP poses problems that make many
observers doubt the privatisation plan is feasible, particularly as more complex sales are due to follow, like loss-making railway operator OSE and heavily unionised electricity utility PPC.
Greece may find it hard to sell assets at prices that the Socialist government and its privatisation-wary MPs can swallow.
The market value of companies, such as PPC or refiner Hellenic Petroleum, are already way below their pre-crisis levels.
Some fear that the tight timetable imposed on Greece by its lenders may lead to a fire-sale at knock-down prices. The nation would have to sell an asset every 10 days to meet its targets.
Greek lawmakers from both government and the opposition have warned they will oppose any
fire sale. Despite passage of a framework austerity law last month which establishes an independent privatisation agency, the sale of big-ticket state companies will still require parliamentary approval.
'Given the haste element, I believe the OPAP stake will be most likely sold at a discount to the stock market value,' another banker involved in the privatisations said .
Source : New Age
No comments:
Post a Comment