ECONOMY

Government turns its attention to the sale of state stakes

After the so-called «social package,» announced by Economy and Finance Minister Nikos Christodoulakis on Tuesday, the government turns its attention back to the market. At yesterday’s cabinet meeting, Prime Minister Costas Simitis said the state company sell-offs and listings must be completed on schedule. The first privatization coming up is that of state-controlled natural gas company DEPA, where the State will sell its stake to a strategic investor. This will take place toward the end of the month. The Cabinet also discussed the need to sell at least part of its holdings in National and Emporiki banks to institutional investors. DEKA, the state portfolio management company, holds a 10 percent stake in National, half of the State’s total holdings, and 9.6 percent in Emporiki, which represents all the State’s holdings. Selling these two large chunks of holdings would help the government achieve, and even exceed, its target of 3 billion euros in privatization revenues this year. It has already raised some 1.8 billion. All privatization proceeds will go toward repaying part of Greece’s enormous public debt and lower it over five percentage points, to 100.3 percent of the country’s gross domestic product (GDP). The sale of a 10 percent stake in National Bank from the State’s holdings is expected to take place in October, at the earliest. As in the past, shares will not be floated on the stock market, but will be sold to institutional investors through bookbuilding, a procedure whereby bids for shares are solicited ahead of the pricing of the issue. The underwriter or underwriters will be hired in early October. Selling the State’s holding in Emporiki may prove to be more complicated. French bank Credit Agricole, which already holds 11.1 percent of Emporiki, has the right of first refusal. It has put up certain conditions, including a lasting solution to the issue of bank employees’ social security funds, which the government is not ready to tackle yet. In October, the government expects important developments concerning the sale of the Postal Savings Bank, a small institution with a very attractive mortgage portfolio. The government is also considering the sale of at least part of state-controlled Agricultural Bank’s portfolio of shares in other public firms, including the Athens water company EYDAP, Hellenic Petroleum and privatized Hellenic Duty Free Shops. This would also help the bank to improve its capital adequacy indices.