ECONOMY

New OTE CEO Vourloumis will pursue further privatization

The proposed new head at telecoms operator OTE is expected to spearhead government plans to cut the State’s stake and step up the pace of restructuring, analysts said yesterday. The conservative government late on Tuesday put forward Panagis Vourloumis, a former banker and chairman of a fridge manufacturer, as chairman and chief executive at OTE, as part of a post-election reshuffle. Shareholders will be asked to ratify the appointment at the annual general meeting. The State is the biggest shareholder in OTE, with a holding of just above 33 percent. Current Chief Executive Lefteris Antonakopoulos was appointed by the previous government. The government’s plans for Greece’s largest company include reducing the State’s stake «when the time is right» to pave the way for a possible strategic alliance. «The conservative government has said it plans to further privatize OTE. Vourloumis will be there to execute this goal,» said telecoms analyst Bosco Ojeda at London-based UBS. Shares in OTE, which has a market value of 5.89 billion euros, closed up 1.2 percent at 11.84 euros, its highest close since March 19, outperforming the broader market, which ended 1.41 percent lower. Analysts said Vourloumis’s biggest challenge will be to speed up restructuring efforts at the telecoms operator, which the current management has long struggled with. Earlier this year, OTE said intensified competition in its domestic fixed-line business and a tough regulatory environment had heightened the need for more stringent cost-cutting. But reducing the head count more aggressively has been difficult due to Greece’s strict labor laws on redundancies. OTE shed 776 employees last year as part of its voluntary redundancy plan. It has reached a deal with trade unions for up to 1,500 voluntary retirements this year but hoped to top the target. Analysts had expected more aggressive staff cutbacks. OTE has also suffered some setbacks in its expansion abroad. It has yet to find a solution to highly indebted Romanian mobile firm Cosmorom, part of Romtelecom, in which it holds a majority stake. «I would expect the new CEO to take more drastic measures to cut costs and defend OTE’s market share in fixed line and to rationalize its investments abroad,» said analyst Yiannis Karyotis at Eurocorp Securities. Analysts said Vourloumis’s lack of experience in the telecommunications industry would not be a significant handicap, and his banking expertise would prove useful. «Managing the group’s cash flow and capital structure is more important,» said Ojeda at UBS. Vourloumis was born in Athens in 1937. He studied at the London School of Economics and the Economic Development Institute. He worked for the International Finance Corporation from 1966 until 1973. From 1979 until 1981, he was governor of Commercial Bank. From 1989 until 2000, he was chairman of Alpha Finance, Alpha Mutual Investment Trust and Banca Bucuresti. From 1993 to 1997, he was chairman of the Association of Institutional Investors. Currently, he is the chairman of listed firm Frigoglass. Vourloumis was also a member of the Trilateral Commission from 1998 to 2002. (Reuters, Kathimerini)