Officials worried about possible company failures

The government is worried about the prospect of businesses going under, especially in the textile sector, and is searching for ways to prop them up while rejecting any notion of nationalization. Labor and Social Security Minister Panos Panayiotopoulos and his deputy, Gerasimos Giakoumatos, yesterday visited Imathia prefecture, in Macedonia, which is home to several textile firms. Many of them are financially troubled but none more so than Naoussa Spinning Mills. The company’s employees are on compulsory leave from July 8 to August 4 and the management has said that its financial situation does not allow it to pay cotton producers. «The issue (the firm’s financial situation) not only regards these particular spinners but the 50,000 producers of raw material which (sell their produce) to the textile firms,» Panayiotopoulos told Kathimerini. Thomas Lanaras, Naoussa Spinning Mills’ main shareholder, has tried to issue a corporate bond that would allow him to restructure the company’s debt. Many bankers, however, are reluctant to undertake issuing such a bond, as the company has failed to agree to their terms. According to sources, the bankers want to make sure that the capital raised will not serve to finance group activities in Bulgaria. Banks also want Lanaras to take an active part in refinancing the debt and to accept the appointment of a manager proposed by the banks to Naoussa’s board. Panayiotopoulos also visited the Neorion Shipyard on the island of Syros yesterday. This company is not in the dire straits that Naoussa finds itself, but Panayiotopoulos, employers, employees and the local unions discussed the possibility of the company slowly turning itself from a shipbuilder into a ship repair facility, an activity with a greater chance of getting sufficient business. Problems such as those encountered in the textile sector worry the government, which does not want a series of private company collapses leading to an increase in unemployment, especially at a time when the winding down of Olympics-related construction activity threatens to leave more unemployed. «The challenge is to ensure the operation of these businesses, even when the businesspeople themselves make such decisions as to render this difficult,» a top government official said.