Spain has suspended its planned float of the state lottery because of the alarming situation of stock markets.
Spain had hoped to raise up to € 9.5 billion (£ 8.3 billion) and help reassure the market that their public finances are in order.
What would have been the largest ever initial public offering of Spain was met with strong opposition by Spain’s Popular Party, which heads the polls before the parliamentary elections start in November this year.
Spain created a company called SEVALAE in December 2010 to privatize around 30 percent of Loterias y Apuestas del Estado.
“At this time, the situation in the capital markets is different to what it was then, and SEVALAE, with due assessment, considers conditions do not exist to guarantee proceeds reflecting the value of Loterias,” a statement from the ministry said.
Spain’s Securities regulator planned to publish a prospectus for the IPO this week after the Spanish cabinet Friday approved the sale last Friday.
Spanish Ministry of Economy said that banks advising on the deal were warning that the deal could yield less than the €20.8bn book value for the Loterias.