January 31 set as the final deadline for the sale of Olympic to IAS

The government appears to be well on its way toward signing a deal with Australian-based Integrated Airline Solutions (IAS) for the sale of a 51-percent stake in Olympic Airways. The new deadline set is January 31, 2002. Yesterday, Credit Suisse First Boston (CSFB), the government’s adviser on the privatization of Olympic, said that negotiations with IAS over a period of 35 days, ending on Monday, had made «satisfactory progress» and that they were entering the final phase. According to CSFB, IAS not only agreed to renew its letter of guarantee, but also to increase it from 3 million to 9 million euros. IAS proposes that a New Olympic Airways be founded – a way to rid it of the old firm’s heavy debts – to which it will contribute 102 million euros to acquire a 51-percent stake. The State, holding the other 49 percent, will contribute 98 million euros. Furthermore, IAS proposes that the New Olympic Airways pay the old company a total of 150 million euros for the takeover of its assets. IAS also wants a three-year option to acquire a further 16 percent of the New Olympic Airways, reducing the State’s stake to 33 percent, plus a six-month option to buy subsidiary Olympic Catering. Government officials said yesterday that the deal will be done by January 31, if IAS agrees to deposit the amount of 102 million euros by then, improves certain points of its business plan and presents a «credible management.» Karatzas said one way of responding to the new challenge would be for companies to acquire larger mass which would enable them to stand out among the crowd.

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