MADRID, Sept 14 - Spain’s planned listing of its state lottery operator is on track to be completed ahead of a November election, in the face of growing opposition from the likely new government and volatile markets.
Loterias y Apuestas del Estado said on Wednesday plans for what would be Spain’s biggest initial public offering — set to raise 7 billion euros ($9.6 billion) for state coffers — had not changed, after a report the government might delay the sale.
“Once the stock market regulator approves the lottery’s IPO prospectus, expected by the end of September, the process will begin for the company to list on the exchange before the first week of November, as expected,” it said.
One source close to the deal said that, ahead of the prospectus approval, analysts were due to meet investors next week to market the offering of a 30 percent stake.
The People’s Party, expected to win office in a November election, is against the sale, having said it would not help the fight to cut the public deficit.
Revenues from privatizations cannot be used to reduce a European country’s deficit, according to EU rules, but can be used to cut the overall debt burden.
Spain has been in focus on international markets amid fears the government has no control of its fiscal accounts after the public deficit, one of the largest in the euro zone, hit 11.1 percent of gross domestic product in 2009.
The treasury has met 67 percent of its medium and long-term debt issuance plans for this year, but concerns Greece could default has pushed refinancing costs to record highs at recent auctions.
“Selling this valuable asset is ridiculous, short term thinking. It’s like selling the family’s luxury Aston Martin car for 2,000 euros just to pay off a tiny amount of the mortgage,” general secretary for conservative think tank Faes Jaime Garcia Legaz said.
According to the right-leaning El Mundo newspaper, the sale was in doubt as the price the government could achieve in current markets was too low.
Many companies across Europe have already pushed back plans to launch IPOs due to choppy markets.
“Investors aren’t desperate for assets so they are going to be quite brutal on pricing,” said the source close to the deal.
“(Any decision not to go ahead) will definitely be a last minute call.”
Additional reporting by Kylie MacLellan in London; Editing by Dan Lalor