Privatisations & Nationalisations

The debate of private vs public is ever alive one.  

While privatisation offers an attractive method to fill in the even stretched national budgets, the often needed state help, as with recent bail out of financial institutions, forms a way of nationalisation.

Privatisation

Vision Finance employees have experience with supervising privatisation of various state owned assets.  Generally there are three fundamental ways to sell off the company:  (i) stock exchange listing, (ii) direct sale to the identified bidders, (iii) distribution to the citizens.

Vision Finance can assist governments with the following functions:

    1.  designing the strategy for privatisation for single companies or entire industries

                     - often it is beneficial to merge small companies into one entity

                     - at times some conglomerates are too big and should be split-up to match investor demand

    2.   establishing certain standards at company level in terms of structure, management, accounting standards

    3.   assisting the governments with identifying the strategy that will bring highest value in the long term

    4.   providing adequate valuations, using comparable companies and transactions and DCF modelling

    5.   if public listing:  assisting the Governments with conducting the initial public offering

                      - if needed selecting suitable domestic and international agents, ensuring low fees and low risk

                      - monitoring of the process, ensuring that the listing costs, including legal costs are under control  

    6.   if private route: 

                     - preparing information memorandums for clients, inclidng value, emplyment rules, strategy

                     - identifying potential investors and preparing teasers

                     - discussing with the investors the terms of purchase, including workforce and offset agreements

Nationalisation

While modern finance does not normally promote Nationalisation of private assets, at times this is the only suitable route at ensuring an overall public good.  

At such times it is especially important that the Governments obtain adequate opinions, in order to ensure that:

    - no laws are broken, and no law suites and arbitrage proceedings take place

    - the country does not lose the reputation with the international community

    - adequate market calculated compensation is paid off

    - in the event of the bail out, that the bail out amount can be converted into the company equity

    - the consultants are engaged in order to ensure a smooth and costless transition of company management