Portugal to Sell off More State Assets

During the next few months Portugal is expected to begin selling state-owned companies as part of a plan to try to persuade the troika to treat the country more leniently this year. The hope is that by selling off the national companies Portugal will be able to gain more support from the European Central Bank and the international Monetary Fund that may lead to interest rates being lowered on loans.

Companies being sold include the airport operator ANA, and the state broadcaster RTP. However it is not always easy to find buyers for state owned companies, as a recent bid for the national airline was turned down as the government was concerned the financing wasn’t solid enough. The Portuguese national airline currently has around €1.2 billion of debt.

Portugal has been told by the troika that it has to sell around €5 billion of state companies as part of its bailout deal, but it looks like the as if it will comfortably exceed this figure due to selloffs in its airports and the electricity sector. The government has already completed sales of 21% of the utility company Energias de Portugal which was sold for €2.7 billion to China Three Gorges, while another 25% share in the electricity grid operator REN was bought by the China State Grid for €387 million.

Portugal is due to return to the bond markets this year, and its borrowing costs have already fallen substantially. If it manages to successfully return to the bond markets then it’ll be a sure sign that its economic crisis is one on the way to being solved.