Banks helped sink Spain lottery sale: chief

30th September 2011, Comments 0 comments

Pressure from banks helped scupper Spain's plan to raise urgently needed cash by selling off its national lottery, the head of the state company hinted on Friday.

Some banks declined to advise their clients of the stock listing because "it would have competed directly with banks (for financing) at a time when they are having difficulty," said the lottery's president, Aurelio Martinez.

He did not name the banks in his comments to a news conference, which echoed recent press reports.

Dozens of Spanish banks had to be recapitalised in the wake of the 2008 financial crisis.

The sale of the lucrative lottery was abandoned on Wednesday because the company considered banks' valuation of 17 to 20 billion euros ($27 billion) was too far short of analysts' valuations of 20.5 to 33 billion euros.

"The determining factor was the price," Martinez said, but added: "For me there are two other factors that explain it," namely pressure from banks and politics.

He echoed the view of some analysts that the conservative opposition Popular Party (PP) influenced the outcome by opposing the privatisation, ahead of November 20 general elections that it is widely expected to win.

"Let's not forget that we are a month and a half away from the elections and the PP had been expressing its view on the sale," Martinez said.

The expected October sale of a 30-percent stake in the lottery, famous for doling out a wealth of prizes in its Christmas draw El Gordo, or the Fat One, would have been the biggest privatisation in Spain's history.

It had been expected to raise up to 7.5 billion euros ($10 billion) to help finance Spain's fast-growing sovereign debt, a major concern of global financial markets.

© 2011 AFP

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