Spain says may cut debt issue by a third in 2011: report

2nd December 2010, Comments 0 comments

Spain can slash borrowing from the markets by a third in 2011 by selling part of the state lottery and airport manager AENA, the finance minister said in an interview published on Thursday.

These asset sales would allow the Spanish treasury to cut debt issues to 30-31 billion euros from 45 billion euros (59 billion dollars) originally planned, Finance Minister Elena Salgado told the Financial Times.

"That will allow us to reduce our stock of debt," she said.

Prime Minister Jose Luis Rodriguez Zapatero said on Wednesday his Socialist government would sell 30 percent of Loterias y Apuestas del Estado and 49 percent of airport management company AENA.

The government had planned to sell a smaller stake of 30 percent of AENA and as recently as January said it had no plans to privatise the lottery firm, one of the world's most profitable lottery groups.

Spain expects to net as much as 5.0 billion euros from the privatisation of the lottery firm and 8.0 billion euros from the sale of the stake in AENA, the newspaper reported.

Loterias y Apuestas del Estado posted a net profit of 2.99 billion euros in 2009, a 3.5 percent increase over the previous year despite Spain's economic crisis.

AENA handled 187 million passengers last year. It manages 47 airports in Spain and has partnership holdings in 16 Latin American airports as well as in London's Luton airport.

The government has cut spending so as to lower its public deficit from 11.1 percent of annual economic outpout last year, the third highest in the eurozone after Greece and Ireland, to 3.0 percent in 2013.

Despite the reduction in new debt issues, the paper said, Spain will still have to pay off about about 150 billion euros in existing debt that matures in 2011.

© 2010 AFP

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