The State is due to disengage itself from telecom operator Hellenic Telecommunications Organization (OTE), retaining only a golden share. The move comes amid the lack of governance and a climate of turmoil at OTE. Despite its assurances that it plans to maintain a minority stake of 33.4 percent in the telecom company, the State intends to cut its current 42-percent holding by 8 percent in the next two months. This will be followed by other measures, regardless of whether a strategic investor for OTE is found or not. Thus, the State’s new privatization scheme for the company will see it maintaining a symbolic presence via the golden share which will also give it veto power. Despite official denials of this new plan, investors abroad are being told of the new scheme. A few months ago while meeting with Deutsche Bank executives for talks on a bond loan, OTE Financial Director Dimitris Kouvatsos confirmed the government’s new privatization plan for the telecom operator. «The government is committed to reducing its stake in OTE (42 percent in the next 18 months) and would gladly give up ownership on the condition that it keeps a golden share,» he told Deutsche Bank. Kouvatsos’s words were recorded in the minutes of his discussion with the executives of the German bank. There are many who interpreted the OTE financial director’s remarks as echoing the views of Economy and Finance Minister Nikos Christodoulakis, and possibly his desire to take over the top post at the company which is reportedly up for grabs. From the discussion, it is clear that Deutsche Bank will arrange a medium-term bond loan for OTE. The funds will be used to finance the company’s investment program. The same bank arranged OTE’s seven-year bond loan in January which was valued at 1.1 billion euros. It was also the principal coordinator of OTE’s convertible bond issued by the State in September last year and was worth 1.7 billion euros. The new privatization plan comes as OTE continues to lose clients, especially corporate clients. Its own estimates for next year point to a loss of more than 350,000 mid-sized and large accounts. And the company’s profitability appears to be in a state of recession with each passing year. In 1997, OTE reported pretax profits of more than 300 billion drachmas. This year, it hopes to reach 200 billion drachmas. Turnover next year is projected to increase by 0.9 percent, service costs by 1.2 percent and pretax profits by 1.7 percent. OTE estimates revenues this year to rise by 5.6 percent to 1.15 trillion drachmas, against 1.09 trillion drachmas in 2000. Expenditure is expected to increase by the same margin as the previous year. Pretax profits are due to plunge to 200 billion drachmas from 276.5 billion drachmas in 2000. Only one company, Kekrops in the five-year period, and five stocks – Kekrops, Tria Alfa common and preference shares, and Klonatex common and preference shares – in the 10-year period, reported 1,000-percent yield increases.