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Ontario Selling off Assets
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| ak87 |
ok so i saw this in the Toronto/southern ontario forum
http://www.thestar.com/news/ontario...ff?bn=1#article
what it is saying is that ontario might be selling government ran assets for private sale
now, the reason I bring this up
I read an online interview before, about a Russian billionaire who made his money from when Russia switched out of communism
With them needing to turn many government ran agencies into private sectors, they quickly sold off the assets (like the idea mcguinty is having)
He talked about how all the people with money tried as hard as they could to buy up the now privatized business's
which in the end made these people incredibly rich, millions to billions of dollars
we all know how loosely ran all government programs are, so anything switched to private can make an immediate efficiency improvement
Now, would a person, or small group of people be buying it?
Or maybe a corporation?
If a corporation bought it, that was in the stock market, I would definitely want to jump onto that stock
my little money could never afford something of that magnitude, but maybe jump aboard someone who can
what are your thoughts?
I am pretty sure the interview I am talking about above, I read through this PDD forum
ideas? |
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| atbell |
Which assets are being sold?
People will always make money if they invest in a good or service which they can sell for more than they invested, the question is what people will want in 5 years, 10 years?
California also sold off some assets recently, nothing exciting but just things like cop cars. I bet the people that bought them aren't doing much better.
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oh, the LCBO, that's a big one. McGinty would be nuts to sell it. A government controled monopoly on an addictive substance? Cash cow. Selling drinks has been profitable for centuries and it resists recessions to the point of retaining value in a full on economic collapse (as per Russia).
If you don't mind selling booze to drunks who are ruining thier lives LCBO spells opertunity.
From a consumer point of view, Quebec and BC definately have interesting varients which are good and bad. Here (Quebec) I can get a 12, 24 or a bottle of wine with my groceries. Makes me spend a bit more on drinks but seems to be less conducive to binge drinking. A bottle of wine or two over the week instead of a 26er on the weekend type of idea. Hard booze is still controled but wine and beer can be sold anywhere, even the corner store, like smokes.
BC has some odd laws about buying from a bar and taking it home. |
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| pmoisse |
The LCBO will be sold the same way that the 407 cash cow was sold. Yes, I'm a pessimist lol.
The thing is, if the gov't sells the LCBO they're creating an unfair monopoly in the marketplace.
The only way it could work for the consumer is if they allowed grocery stores the right to sell beer and wine (like in Quebec and most of Europe). They're the only ones with the established distribution network and buying power to compete.
I would rather see Hydro1 or Ontario Power or especially the godawful TTC privatized. All of them have proven to be varying degrees of ty at running a proper business even with a ing monopoly. |
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| Moral Hazard |
Meh, the concern that Ontario would loose a boat-load of chash by selling the LCBO is folly. The vast majority of the LCBO's revenue comes from excise taxes on alcohol, which are erroniously recorded as revenue for the LCBO rather then tax. These taxes are mandated by legislation and would be in place regardless of who was selling the liquor (which is why buying a bottle of wine at a winery costs just about as much as the same bottle through the LCBO). If the province were to sell the LCBO they would retain that revenue and off-load the operating expenses. The only loss to the province would be the operating profit, which is minimal to non-existant. The last year I could find data for was 2002-2003 (LCBO does not publish annual reports) claimed $939 million on sales of $3.1 billion; however, after paying $975-million taxes (income and excise), the LCBO lost $35 million. I'm not saying that it loses money every year but the claims of billon dollar profits are an accounting trick rather then reality and have nothing to do with the LCBO retail operations.
All the above stated, I think that selling any crown assets at this time is a bad idea. The market is terribly de-valued right now and the only players with enough cash to buy the LCBO or OLG are private equity companies or pension funds. Both of these types of investors have taken a beating over the past yearish and would only be willing to make acquisitions of this ilk if they were picking it up at a bargin. So, if we were to sell these assets now we can pretty much count on getting well below what the market value would be in a couple of years. Selling crown assets in a bad market, especially for the purpose of financing debt, is bad policy. |
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| pmoisse |
| quote: | Originally posted by Moral Hazard
All the above stated, I think that selling any crown assets at this time is a bad idea. The market is terribly de-valued right now |
Good call, but when has a cash strapped government ever used common sense to come to any decision? |
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| ak87 |
| quote: | Originally posted by Moral Hazard
All the above stated, I think that selling any crown assets at this time is a bad idea. The market is terribly de-valued right now and the only players with enough cash to buy the LCBO or OLG are private equity companies or pension funds. Both of these types of investors have taken a beating over the past yearish and would only be willing to make acquisitions of this ilk if they were picking it up at a bargin. So, if we were to sell these assets now we can pretty much count on getting well below what the market value would be in a couple of years. Selling crown assets in a bad market, especially for the purpose of financing debt, is bad policy. |
So if it comes close to sale, and the government sells it off, we need to pick which pension fund is buyin it |
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| Moral Hazard |
| quote: | Originally posted by ak87
So if it comes close to sale, and the government sells it off, we need to pick which pension fund is buyin it |
My money would be on the Ontario Teachers Pension Fund... they gots the most cash. |
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| Fir3start3r |
| quote: | Originally posted by Moral Hazard
My money would be on the Ontario Teachers Pension Fund... they gots the most cash. |
Agree.
They're the largest investment group in Canada and after taking over 66% of the MLSE (Maple Leaf Sports and Entertainment - which owns most of the major sports teams minus the Blue Jays) I understand the teacher's investment portfolio went up about 40%.
Thems teachrs er smrt!
With a portfolio of approx. $87 Billion, I'm sure it won't be a problem for them... |
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| Audbrey76 |
| Cool. The canadian dollar was above the american dollar but it went back under. Canada is not always the favorite neighbor to me I like mexico! |
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