Privatizations do not generate the fees they once did for equity capital
markets bankers. Globally, the sale of government assets to the market
so far this year is at its lowest for both value and number of deals
since the same period in 2009. But
in Europe, the Middle East and Africa all that could change.
By the end of July the three deals to have completed in Emea were
already worth $6.2 billion – a higher value than any full year since
2007, when there were 17 deals worth $20.7 billion in the region.
The UK government then began the selldown of its stake in the Royal Bank of Scotland on August 3, raising £2.1 billion after selling a 5.4% stake in the lender. UK Chancellor George Osborne called the sale "an important first step" in returning the bank to private ownership and added that it would promote financial stability.
The pipeline of deals is also looking healthy. Osborne announced in his July Budget that the sale of government assets this year “will deliver the largest privatisation proceeds of all time”, driven by returning banks bailed out during the financial crisis to private ownership. A central part of Greece’s bailout discussions with European authorities has been the establishment of a fund to hold some €50 billion of state-owned assets that can be sold. And while bankers await clarity on those programmes, governments across Emea are preparing their own transactions.
Debt is driving the trend. Edward Bibko, the head of global capital
markets at law firm Baker & McKenzie, said: “Governments who are
voluntarily or involuntarily pursuing austerity policies will all be
selling assets to help pay for budget cuts. The question is finding
quality assets to sell, since most of the western European governments
went on significant privatisation binges in the ’80s and ’90s.”
A lot is riding on the eagerly awaited initial public offering of the Turkish stock exchange, which offers “a great opportunity” for the development of the country’s capital markets.
The UK government then began the selldown of its stake in the Royal Bank of Scotland on August 3, raising £2.1 billion after selling a 5.4% stake in the lender. UK Chancellor George Osborne called the sale "an important first step" in returning the bank to private ownership and added that it would promote financial stability.
The pipeline of deals is also looking healthy. Osborne announced in his July Budget that the sale of government assets this year “will deliver the largest privatisation proceeds of all time”, driven by returning banks bailed out during the financial crisis to private ownership. A central part of Greece’s bailout discussions with European authorities has been the establishment of a fund to hold some €50 billion of state-owned assets that can be sold. And while bankers await clarity on those programmes, governments across Emea are preparing their own transactions.
A lot is riding on the eagerly awaited initial public offering of the Turkish stock exchange, which offers “a great opportunity” for the development of the country’s capital markets.
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