Tuesday, 12 July 2011 09:08

Greek Asset Sales Fall Short, As We Virtually Guaranteed They Would In Spring 2010 Featured

Here's a surprise that many may not have expected, Bloomberg reports Greece May Not Complete All Asset Sales

Greece’s deputy finance minister, Pantelis Economou, said the country won’t manage to sell everything on its list of planned state-asset sales and real- estate developments. “We will sell a lot less than planned,” he told lawmakers yesterday, according to a transcript posted on the Parliament’s website.

Greece aims to raise 50 billion euros ($69 billion) through asset sales and property developments by the end of 2015, part of a package of fiscal measures demanded by the European Union and the International Monetary Fund in exchange for financial support. Parliament approved the measures in two votes at the end of last month...

“Selling state holdings to reduce Greece’s debt is a necessary condition to get what we are entitled to,” Economou told lawmakers. He added that eliminating tax evasion can “buy time” for Greece and help to meet revenue targets through 2015, according to the transcript.

The Finance Ministry announced the board of the agency that’s been set up to supervise the asset sales. The program includes plans to sell stakes in Public Power Corp SA (PPC) and gambling company Opap SA (OPAP), as well as Greece’s two biggest port operators and banks.

Now, here's the kicker...

Economou said there isn’t enough investor interest in the assets for sale as “credit default swaps and spreads are the kinds of thing they have their eyes on.” Concrete assets are “riskier,” he said.

Methinks Mr. Economou (what irony is there in an name???) may be missing the forest due to tree bark irritants in his corneas.There will be plenty of investor interest in hard asset sales if said hard asset sales were priced realisitically and with true price discovery enabled. The problem is that that's just not the case. The proforma asset sales numbers proffered by the Greek government were ridiculously optimistic, and that was before said asset's market prices tumbled off of a cliff the 2nd and 3rd times. As it stands now, CDS and are easier to price than Greek assets with cooked books. How cooked? Refrerence

  1. Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest?

  2. Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

Now, let's reference the biting piece that directly addressed and forecasted todays Greek asset sale problems over a year ago, Greece's Circular Reasoning Challenge Moves From BoomBustBlog to the Mainstream

We initially broached this topic in the spring of 2010 after illuminating the abject fallacy of Greece forecasting asset sale prices that were greater than the prices of the assets current market price - despite the fact that Greece is widely known to be a distressed seller. Last month, I revisited the topic in Greece Reports: "Circular Reasoning Works Because Circular Reasoning Works" - Or - Here Comes That Default!!!

Greek Reporter (hat tip to ZeroHedge) reports: Government Finalizes Privatization List

The Greek government will proceed with the acceleration of the privatization of state property and companies, setting a target of at least €15bn by 2015. [Reference the highlights of the BoomBustBlog subscription document below.]
The decisions are expected during the week, probably on Wednesday, at the meeting of the Biministerial Committee on Privatization. The government will finalize a list of companies and property for utilization, which will be presented by Prime Minister George Papandreou to the European leaders in Brussels.
Special Secretary for Privatization G. Christodoulakis and bank representatives have been preparing the content of the list at a meeting yesterday.
National Bank and London-based CC&C Advisors LTD have been assigned the task of financial servicing related to planning, monitoring, coordination and implementation of the restructuring and privatization program.
The Committee will have to approve the award of the of the utilization program to the qualified Greek banks, but also to the consultants who will carry each project.

Sources note that consultants for Athens International Airport have already appointed, while the proposed list includes:
The concession of ports and airports with long-term contracts
• The extension of concession period for Athens International Airport

• The sale of a stake of Public Gas Corporation
• The sale of a 49% stake of Casino Mont Parnes
• The privatization of state lotteries through concessions
• Finding a strategic investor in Hellenic Post
• The sale of a stake of OTE, Hellenic Defense Systems and Larko
• Renewal of OPAP’s licenses
• Licenses for online betting and “slots”
• The concession of Egnatia Odos
• The sale of TRAINOSE
The sale of state stakes in banks (Hellenic Postbank, ATEbank, Consignment and Loans Fund)
• The privatization of water supply companies (EYDAP, EYATH)

This is a tragic Greek comedy. Professional/institutional subscribers should reference the Greece Public Finances Projections Greece Public Finances Projections 2010-03-15 11:33:27 694.35 Kb in its entirety. For those who chose not to subscribe, I am posting excerpts from pages 5 and 6 from said document, don't read this while eating or drinking for fear of spitting up your lunch!

 

Any subscribers who would have went heavily bearish into these banks when I first commented on the would have done quite well:

 

Reference the latest Greek exposure research released this week for subscribers File Icon European Bank's Greece exposure and stay tuned for a traipse through select French bank exposures in the very near future.

As usual, yours truly,

The wielder of the Fiery Sword of Economic Truth, cutting through investment related Bullshit in a country near you!

Last modified on Friday, 15 July 2011 10:55

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