More negotiations over Olympic sale needed, government says

The government said yesterday more time may be needed to complete a privatization deal for Olympic Airways aimed at rescuing its the ailing national airline. All hopes of selling Olympic, one of Europe’s most troubled carriers since the collapse of Swissair and Belgium’s Sabena, are pinned on a proposed sale to Australia-based Integrated Airline Solutions (IAS), a group led by Greek tycoon Pavlos Vardinoyiannis. A deadline for a deal expired on Thursday and the government had pledged to issue a decision on Monday, but later said more time might be required. «Maybe the discussion needs to be continued a little, maybe there’s a need for some more guarantees, maybe some points have to be clarified,» government spokesman Christos Protopappas told reporters yesterday. IAS sources said the group had asked for a 15-day delay to satisfy government requirements for financial guarantees. But government sources indicated the time would be used for substantial talks on other pending technical issues. «It’s a complicated issue. Nothing is finished yet,» one government source told Reuters. Meanwhile, Vardinoyiannis, a shipping, oil and construction magnate, denied reports that he was pulling out of the bid. IAS, bidding for a 51-percent stake in Olympic, is the airline’s only remaining suitor. The government has not said what it would do if the negotiations fail, but Europe last year already saw the financial collapse of two loss-making national carriers, Swissair and Sabena. Banned by the EU from pouring any more money into Olympic, Greece has said the state carrier has no option but to be privatized. The airline’s management has warned it would run into cash flow problems in February. IAS had ambitious plans to restore Olympic, founded by the late Greek shipping tycoon Aristotle Onassis, to its old glory but the government has made clear the airline must shrink to survive. «What’s encouraging in the (UK) report…is that the new orders (index) continues to tick up…the overall number is modestly rising,» said Arjun Mittal at American Express Bank.

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