OPAP: Greece and privatization of state owned companies

This is a somewhat more abstract post about the announced privatizations of Greek state owned shares in listed companies.

I’m not a big fan of privatizations, especially when some of the companies are true cash-cows, however this is something that really strikes me and I think those are good examples for current problems.

If privatizations have to be done, they should be done right, i.e. maximizing the potential income from the selling. Now let’s come to the way it’s done in reality.

The plan of privatizing assets was officially introduced in mid-2011, with a goal of 50 billion Euros in revenues from asset sales until 2015, starting with 5 billion in 2011. A plan which was already back then heavily doubted by the public.
Now it’s Mai 2012 and the sale of OPAP (gambling) and Hellenic Petroleum is delayed until the new elected government.

So let’s calculate a bit: One year ago OPAP was traded at 13,38 EUR, HePetro at 7,13 EUR, yesterday it was 4,40 EUR and 5,06 EUR, respectively.

We will continue with OPAP only:

-27/01/2012: Government transferred 29% of all OPAP shares to the Hellenic Asset Development Fund based on a law dating 27.10.2011.
-This are a total of 92.510.000 shares transferred to the fund in order to be sold.
-Which were then expected to be (partially) offered in March.
-Until now nothing happened, sell-offs are on ice until new elected government gives new directions

I put my calculations into this graphic:

 

So up to now there is more than half a billion loss thanks to this slowly process and this is only ONE company, out of several (plus all the other non-listed assets).

And further losses are to be expected; the biggest institutional investor left the ship, selling off his shares.