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NEWS > EVERYONE ELSE > ITALY TURNS TO CHINA FOR POSSIBLE BUYOUT
ITALY TURNS TO CHINA FOR POSSIBLE BUYOUT
September 14 2011
Rome, Italy – It was inevitable, eventually, that China would start to turn its massive fortune on the world. With more money than they know what to do with, it was only a matter of time before China started to go on a spending spree. Now at least one country is going to the big red nation in hopes of selling part or all of their nation.
According to reports, Italy has approached the emerging superpower with a request for help with a bailout as they continue to struggle with debt repayment. While it’s not yet clear whether China is interested, recent efforts to purchase huge swaths of the Caribbean shows that the nation is ready and willing to part with some of its massive war chest, for the right properties.
Initially, again according to the reports, Italy would sell China a handful of government bonds but with the promise of more sales in the future. Such a move would add to a growing supply of European bonds purchased by the country in the last few years, but the request by Italy is t he first of its kind and suggests that the country may be looking to sell, either to China or another bidder with deep pockets.
“It’s not at Greece levels of concern yet but it very well could get to that level and that is why the country has made this offer. They have decided that they need to test the market, to see what interest there may be out there, and they will make a decision based on that,” said an Italian government insider. “We are not looking for a full sale quite yet but we are most certainly open to the opportunity if the deal is a good one.
Right now, this money will help secure certain things, allow us to make some payments, but we do not know what the future may hold.
China has made relatively limited investment in Europe over the last year, something which had many concerned that they had lost interest in the continent after being rebuffed in their efforts to purchase Greece by Germany.
“It’s an interesting move and could very well signal a major step into the continent by the Chinese should it go forward. Italy isn’t in quite as desperate a position as some other countries but they also don’t want to get to that level either, and so selling while the stock is still high might be good idea,” said Scrape TV International analyst Gustav Hander. “Under Chinese ownership, Italy could do quite well and weather the storm better than some other countries. It’s a very comforting thing for investors when they can be sure that the management of any entity is stable and well endowed, which perfectly suits China.”
China has also continued to show interest in the Caribbean, though no countries have taken up the offer as yet.
“It’s really a smart move by Italy. They are getting in early and though the selling price might be low, because China is still cautious about the whole process, they will guarantee a sale, or at least come as close to that as possible. Eventually China will stop buying and so selling early might be the best guarantee even if the price is lower,” continued Hander. “Italy, too, would be a good investment. Educated population, strong military, and a healthy tourist industry mean good financial upside for the right type of management. All good things for a potential investment.”
It’s believed that any deal would be contingent on removing current management from the board of the country.
Emil Uliya, International Correspondent
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