Talks about OA acquisition in final straight
The two short-listed suitors for not-so-coveted Olympic Airlines are in the last stage of the bidding process, negotiating in parallel with Lazard, the Greek government’s consultants. Final decisions are expected within the fortnight. The two companies still in the running are Klesch and Company, a British fund buyout specializing in the purchase of troubled companies, and the Olympic Investors consortium, backed by Greek Americans. The negotiations are in the final straight and the two rivals are forming the text of the acquisition agreement for Olympic Airlines with respect to each’s own terms and conditions. According to sources, the two are seeking guarantees about the validity of OA’s presented data, implying that in the contract there ought to be provisions regarding obligations that may emerge during the acquisition process; something that must also be validated by Parliament. Klesch and Company is proceeding with a business plan toward rationalizing the network and limiting OA’s operation costs. It suggests a reduction of staff by about 250 people, as well as a revision of ground-handling and technical support contracts, among others. Therefore, the seller, i.e. the state, will have to tackle immediately the issue of renegotiating the collective labor agreement with flight staff, or even a form of voluntary redundancy, provided that this will not be considered a state subsidy. Olympic Investors, for its part, is seeking guarantees about the debts it is to undertake, fearing possible still hidden debt. It also demands an affirmation of the obligations deriving from all the big contracts of the company and an evaluation of outstanding legal issues (civil claims by third parties). Consultations with the two candidates will conclude in the next few days. Then the two companies will have to submit binding offers. Olympic Airlines’ price tag hovers above 100 million euros. Beyond that, the two bidders must reveal their sources of capital.
