Greek banks prepare to restructure corporate loans of 5 bln euros


Banks are preparing a major endeavor to restructure problematic corporate loans which extend across four key business sectors and add up to some 5-5.5 billion euros.

In the coming weeks and months the credit sector aims to tackle loans worth 1.1 billion euros in the steel industry (of which about half are nonperforming), a billion taken out by car dealerships, 2-2.5 billion euros in hotel companies’ bad loans and another billion concerning hospital suppliers.

At the same time, despite major delays, banks have proceeded to the restructuring and streamlining of nine major corporations, tackling bad loans that add up to 1.7 billion euros. They concern fish farming companies Dias, Selonda and Nireus, supermarket chains Veropoulos and Marinopoulos, as well as Vovos, Davaris, Maillis and Nikas. Veropoulos has now been successfully absorbed by Metro and Marinopoulos taken over by Sklavenitis.

Those moves have kept alive the above enterprises, which have combined assets of 2.5 billion euros, total turnover of 2 billion euros per annum, and some 14,000 employees, with Marinopoulos accounting for the majority of that. After restructuring, the loan obligations of the companies have been reduced by 50 percent.

In the coming period a new series of streamlining efforts at large business groups is expected, along with court developments. It is estimated that the streamlining agreement for fuel company Jetoil will have been signed by March 24, so that it can be submitted for court approval.

Besides the restructurings of major groups, in the 2015-16 period lenders proceeded to the resettlement of loans taken out by 80,000-100,000 small and medium-sized enterprises adding up to more than 6 billion euros, in order for them to better handle the impact of the economic crisis.

Tackling NPLs constitutes the greatest challenge faced not only by the credit sector but also the economy in general toward its recovery. The Bank of Greece has repeatedly highlighted the need for coordinated action by banks to face the problems on a permanent basis with long-term interventions.