RT @OECD: "People should be at the centre of policies" - #ChampionMayors commit to #Seoul Implementation Agenda https://t.co/7OUNmAZCON (PD…
21/10/2017 12:49 AM
@GaneshAhirao You are right - courage to confront the doomsayers is key.
21/10/2017 12:46 AM
@GaneshAhirao @NZMorningReport Worries always overblown - take currency range over past year last days = nothing si… https://t.co/7SOCTB8oMR
21/10/2017 12:44 AM
RT @stujanderson: Amazing how few understand this. Nothing suddenly happened to supply 20 yrs ago - but lenders did start dishing out 7 x e…
16/10/2017 11:04 PM
RT @spexyone: Are you of a certain age ? https://t.co/lVlkwuH5jD
16/10/2017 9:22 AM
RT @paulkrugman: Zombie ideas are claims that have been proved false but just keep shambling along. GOP tax plans are totally infested. A p…
16/10/2017 9:09 AM
RT @HarvardBiz: Understanding the science of innovation could make all the difference in your ability to compete https://t.co/3r21BXPJKE
16/10/2017 8:58 AM
https://t.co/iO6E5xPqQZ
16/10/2017 8:48 AM
RT @TheMFGnetwork: Event Reminder 16/10 @bernardchickey workshop: Connection between Govt economic policies& manufacturers’ bottom line htt…
14/10/2017 8:18 AM
RT @Adherium: Scott Fleming, Sr. Vice President at @Adherium accepting the award for Best Implementation of Digital Healthcare at the OBN A…
14/10/2017 8:18 AM
Recent Post Comments
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.

Print-friendly
28
JAN 11

Asset Sales




Happy New Year to all.

Is selling assets a good idea?

•We look to one of the longest standing, most successful, elites in the world – the English aristocracy, their strategy “don’t sell land– lease it” that way you hold onto stuff.
•If the asset gives a return at or above your weighted average cost of capital, don’t sell, particularly if there are some capital gain and inflation offsets along the way.
Are all assets the same?

•Let’s face it given the opportunity to buy into a monopoly or near monopoly, or an asset that can priced to leverage the selling price of production we would, or conversely you held it why would you sell it? Power generation fits this profile an airline does not.
Does the type of ownership influence the quality of governance and management of an asset?

•Maybe but there is no clear answer, assets in private hands are run badly and very well, the same applies to public ownership.
 

So a few conclusions:

•Without a good reason to sell don't, feeling you have to might say more about your state of mind on alternatives than the wisdom of selling.
•Unless you really, really have to, and it is hard to see why that would be the case on any asset that is providing a return above the weighted average cost of capital, there is no good reason countenance privatisation of a near monopoly, and see monopoly rents transferred from the public domain.
•Sell the all the airline but not the power companies.


tags: asset sales, asset sales, power companies, privatisation
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.