Other options for OA sale

Greece will examine other ways to sell Olympic Airlines if the European Commission blocks the proposed sale of the national carrier to private Olympic Investors – York Capital, a Finance Ministry official said yesterday. «The government will also examine alternative methods of sale, including a partial sale of the company, in the event that there is a problem with the EC’s decision; meanwhile, we are continuing to negotiate with the interested investor and await the decision of the European Commission,» the official said. Earlier this month Greece signed a preliminary agreement to sell Olympic Airlines – which was born out of Aristotle Onassis’s original Olympic Airways – to the preferred bidder, private New York-based investors group Olympic Investors -York Capital. The agreement requires European Commission approval as Olympic has been under EU scrutiny for several years because of past funding provided to Olympic that was deemed by Brussels to be government subsidies paid to keep the airline flying. A source close to the deal, who spoke on condition of anonymity, said a partial sale meant the possible sale of Olympic’s assets, such as planes or its brand name, before shutting it down. Earlier this year the EC urged Greece to recover 194 million euros ($240.2 million) in illegal state aid given to the old Olympic Airways after the European Court of Justice ruled in May that Athens had not done enough to get the money back. The European Commission launched an investigation in March 2004, saying it had doubts about the Greek plan to set up and privatize Olympic Airlines. It said at the time it wanted to ensure no state aid was involved in the process. Greek media reports in recent days have suggested the EC will rule against Greece and insist any past state aid is repaid. Transport Minister Michael Liapis has said the sale is the loss-making carrier’s last chance for survival. Olympic Airlines remained in the red in 2004 for the second consecutive year. Olympic Airlines, the successor of debt-laden Olympic Airways, posted a net loss of 87 million euros last year and a loss of 23 million euros in 2003 when it was launched. The accumulated losses are dangerously close to the airline’s equity of 130 million euros. Greece is trying to privatize the airline as part of a plan to sell 1.6 billion euros of state assets to help pay off public debt, one of the highest in the eurozone as a percentage of gross domestic product.