Greece faces collapse of second key privatisation

Πηγή: FT
By Kerin Hope
June 27 2013

Greece is struggling to avoid the collapse of a second big privatisation, amid pressure from bidders for the state gaming monopoly to change terms of a deal agreed last month.

The problems with the €700m sale of OPAP threaten to add to tension with Greece’s international creditors, who fear the slow pace of privatisations will require further more cuts to keep the country’s bailout programme on track.

Emma Delta – a bid vehicle backed by Greek oil tycoon Dimitris Melissanidis and Czech billionaire Jiri Smejc – made the only offer for the Greek state’s 33 per cent holding in OPAP.

According to documents seen by the Financial Times, Emma Delta now wants to cancel two elements of the deal: a three-year, €110m contract with Intralot, OPAP’s Athens-based technology supplier; and a 12-year concession to operate the Greek state lottery in return for a €190m down payment and €50m annually.

The lottery was awarded last year to a consortium including OPAP, Intralot and Scientific Games of the US, the world’s largest lottery software provider. Neither contract has been signed.

Greece’s privatisation agency, Taiped, has rejected formal complaints by Emma Delta threatening to pull out of the deal and take legal action if its demands are not met.

Costas Louropoulos, OPAP’s chief executive, complained in an email seen by the FT that he felt put under pressure by Mr Melissanidis in a series of telephone calls.

“He insulted me, as on many previous occasions . . . You dare to sign [the Intralot and lottery contracts] and I will take your head off,” Mr Louropoulos quoted Mr Melissanidis as telling him on May 20.

Taiped failed to deliver one flagship privatisation this month when Gazprom unexpectedly pulled out of the bidding for the state natural gas supplier Depa. If the OPAP sale falls through, Greece’s privatisation programme will be in disarray, raising the possibility that the “troika” of international lenders – the International Monetary Fund, European Central Bank and EU Commission – could appoint international managers to replace Greek executives hired by the Athens government to sell €15bn of state assets by 2016.

A review of Greece’s bailout by the IMF this month found that income lost through slippage of the privatisation programme would contribute to a hole in Athens’ budget and “additional financing will need to be identified”.

The disposals of Depa and OPAP were expected to cover about half this year’s €2.6bn target for privatisation revenues agreed with the EU and IMF but failure to sell OPAP would probably to see income from disposals this year fall below €1bn. The target has already been revised downwards twice because of the risks associated with investing in recession-mired, politically unstable Greece.

Taiped has pulled off only one sizeable deal this year: the €400m sale of Desfa, the natural gas grid operator to Socar, the state gas operator of Azerbaijan.

Mr Melissanidis controls Aegean Marine Petroleum Network, a global supplier of marine fuel listed on the New York Stock Exchange. Mr Smejc is the owner of Emma Capital, an investment company, and is one of the largest shareholders in Greece’s Piraeus Bank.Stelios Stavridis, Taiped’s chairman, insists that the OPAP deal must not be changed. “The country’s credibility is at stake,” he said. “We’ve made clear that we’re responsible people [at Taiped] and that no one can interfere with our work.”

The other partners in the vehicle are also financial investors: Russia’s ICT group, J&T Finance of Slovakia, Czech-based KKCG and Christos Copelouzos, a Greek businessman with ties to Gazprom. Lottomatica, the Italian gaming operator, is also a participant.

Critics of Greek privatisation say the OPAP dispute illustrates how Taiped’s mandate to “sell to the highest bidder” without giving priority to qualitative criteria or operational experience has undermined the programme. “The programme has suffered overall because of a lack of interest from globally recognised players,” said one consultant who declined to be named.

Mr Stavridis, Taiped’s third chairman in less than a year, said he was “cautiously optimistic” about persuading Emma Delta to drop its demands. “We negotiated the OPAP deal in a transparent way and in line with international practice. Now we have to make it stick,” he says.

A spokesman for Emma Delta, on behalf of Mr Melissanidis, declined to comment. Mr Louropoulos could not be reached for comment.

Greece to sell gas firm, grid operator this year: source

Greece's Prime Minister Antonis Samaras addresses parliamentarians during a session at the parliament in Athens July 8, 2012.

Πηγή: Reuters
August 6 2012

Greece wants binding bids for its state-owned natural gas company and gas grid operator by the end of September and hopes to complete their sale in late autumn as it revives its privatization drive, a government official told Reuters on Monday.

Hoping to regain credibility with international lenders keeping Greece afloat, the new conservative-led government has made speeding up privatizations a priority but has admitted delays from repeat elections in May and June.

After a meeting between political leaders and the finance minister on privatizations, the official said the government's priorities also included the sale of betting firm OPAP, the old Athens airport and buildings in Athens and on the islands of Corfu and Rhodes.

"What we're aiming for through the privatizations, apart from generating revenues, is to change the role of the state in the economy," the official said on condition of anonymity.

He said Russian, Italian, U.S. and French companies had expressed an interest in the natural gas company DEPA and gas grid operator DESPA.

Athens initially targeted privatization proceeds of 50 billion euros ($62 billion) by 2015 but cut the target to 19 billion euros after a making slow start on the program.

Former privatizations chief Costas Mitropoulos, who stepped down last month after accusing the government of hindering his efforts to sell assets, estimated that Athens would not raise more than 300 million euros from privatizations in 2012.

It had targeted 3 billion euros for this year.

More than 90 percent of the privatization program includes the lease and sale of concessions of state land and infrastructure, the government has said.

Local firms prepare to ‘buy’ Greece

Charles C. B. KIM: Director, Head of New Business Center Woori Investment & Securities Co.

Πηγή: Korea JoongAng Daily
Oct 24 2011

One’s crisis can be another’s opportunity, as seen today from the ongoing fiscal turmoil in the euro zone. While southern European nations are trapped in a mounting debt crisis, Korean firms are preying on those ailing European companies for possible low-priced mergers.

Recently, Woori Investment & Securities sent a group of officials to Greece - one of the southern European countries seeking rescue from high debt along with Spain, Italy and Portugal - to look for business expansion opportunities in the financial sector. The brokerage unit of Woori Finance Holdings is considering investing in a Greek firm jointly with other Korean private equity firms or corporations that are interested.

“Investment opportunity is significantly high right now because Greek companies are on sale for mostly giveaway prices,” said an official from Woori. “They include large-sized public firms as well as private ones.” Korean firms that have expressed interest in seeking merger opportunities in the European region are mainly financial firms as well as private equity funds and private investment firms.

According to the Korea Trade-Investment Promotion Agency (Kotra), Greece will be active in putting its firms up for sale this year and next year, many of which have high industry market share in the European region in various sectors, including gambling, electricity, gas, and defense. One of them is the lucrative, Greece-based gambling company OPAP, which last year alone raised 4.9 billion euro ($6.8 billion) in sales and 893 million euro net profit. The sale of the cash cow OPAP was initially planned for this year but has recently been delayed to next year. The debt-choked country is also planning on selling the Hellenic Postbank, Larco Mining, Public Gas Corporation, Athens International Airport and the National Bank of Greece. The Greek government has hired global investment banks, including Deutsche Bank, BNP Paribas and Ernst & Young, as its sales advisors.

Based on the terms of the European Union and the International Monetary Fund bailout plan for Greece, the country must raise 50 billion euros by 2015 from selling stakes in public firms and other assets to amplify its capital to cover up its debt. This year, Greece’s debt is expected to reach 162 percent of its gross domestic product.

“It is very important for the country to complete the privatizations mission and regain credibility. This is even more important than proceeds,” Costas Mitropoulos, chief executive of the Hellenic Republic Asset Development Fund, was quoted as saying by Reuters last week.

According to Kotra, Greek government officials are welcoming Korean firms to invest in them, advertising to Korean companies that they will be able to gain a foothold on expanding businesses, especially on the Mediterranean coast, by investing in infrastructure like airports and harbors.

Mirae Asset Financial Group has also recently expressed its intention to purchase a luxury Italian brand. The name of the brand that the financial group is seeking to purchase, however, hasn’t been revealed, though there are many Italian luxury brands, including Gucci, Armani and Benetton. Italian firms are also currently facing a credit crunch triggered by market jitters over the country’s public finances. According to industry sources, the financial group’s chairman, Park Hyeon-joo, recently told his high-level staff to keep an eye on potential sales of other European companies and be aggressive in seizing opportunities to buy them at low costs. Earlier this year, Park told the media that there will be three to four mega-deals this year, following its deal in jointly acquiring Acushnet Company, the world’s largest golf equipment company, part of the Fortune Brands corporation. The move was seen as part of efforts to target the Chinese market, where demand for luxury items such as golf clubs is growing.

Samil PricewaterhouseCoopers, the Korean member firm of the London-based services firm PwC, has also recently put together a task force as part of efforts to prepare investments in Greece and Italy.