Major transactions can be the focus of strategic reviews and scoping studies. A strategic review:
• is a review of possible options for the future management of areas of government activities or assets, where a transaction to divest could be one option. A strategic review precedes the Government decision to sell.
A scoping study:
• follows an in-principle decision to explore divestment options and involves a detailed investigation of the structure and timing of sale ahead of Government endorsement of that structure. A scoping study will typically include a market sounding where an advisor approaches third parties to test their appetite for certain assets or financing structures.
Strategic reviews are not subject to the Governance Framework but scoping studies are subject to the Governance Framework. If an agency undertakes a strategic review that includes consideration of divestments, the agency should consult with Treasury.
Market soundings for a major transaction can only be undertaken as part of a scoping study for the major transaction.