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Sell, Sell, Sell: Everything Must Go in Great Fire Sale! - Europe Now 50% Off
The world's biggest annual lottery payout, Spain's famous Christmas El Gordo (Fat One), spreads joy to tens of thousands of winners – but the biggest winners of all may soon be investors who snap up part of the state company behind the lottery.
The country's State Betting and Lottery (LAE), which offers a series of prize draws, also brings a huge dose of Christmas cheer to the country's treasury. Of the €2.15bn Spaniards bet on the draw, almost a third is retained by the lottery administrator.
Spain is not as badly indebted as other European countries, but bond yields have soared as Greece, Ireland and Portugal have been forced into bailouts. Spain's socialist government, led by José Luis Rodríguez Zapatero, has set strict deficit targets to avoid the fate of its southern European neighbors. Sales of stakes in the state lottery and the country's airports authority form part of the plan for pulling safely back from the brink.
Some 30% of the state lottery will be sold as the organization behind the 151-year-old El Gordo becomes what may be the world's biggest listed gambling company, valued at up to €25bn.
The company recorded €3bn net profit in 2009 on sales of €9.8bn – meaning the sell-off will reduce treasury income by about €1bn a year.
RBS recently won a contract to run the privatization of up to 49% of Spain's airports authority, AENA, which has a book value of €2.6bn. The government also plans to auction off Madrid's Barajas airport and Barcelona's El Prat by the end of the year.
Reform of the country's savings banks means that many will also soon be seeking stock market listings.
-Giles Tremlett Madrid
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