ECONOMY

OTE chief says dividend will be paid in 2007

BARCELONA – Greece’s largest telecoms operator OTE has not received any bid approaches and hopes to start paying a dividend again in 2007, its chief executive said yesterday. Chief Executive Panayis Vourloumis said the fact that the Greek state owned 38.6 percent of OTE and that the company was embroiled in a radical restructuring was likely to prove a bitter pill for any would-be predator. But in the meantime, Vourloumis said OTE, which suspended dividend payments in 2004, hoped to resume them in 2007 on the back of 2006 earnings. «We won’t pay a dividend in 2006 out of 2005 profits… This creates for us, I think, an obligation to take care of our shareholders the year afterward,» he told a Morgan Stanley investor conference in the Spanish city of Barcelona. «And if things go as we expect them to – I don’t think we will return to the (dividend) trends of pre-2004 years – but I think we will take care of a very good deal,» he added. OTE expects to slash about 5,500 jobs, roughly one-third of its workforce, in the coming year in a controversial redundancy plan to help shore up profits at its struggling fixed-line unit. But as bid fever grips the European telecoms sector, Vourloumis dismissed suggestions that the company would be an easier target if it were broken up. «So far as our staffing is like this, I would find it difficult for them (bidders) to become interested in OTE as a whole and we would never consider splitting up OTE and selling off the good parts and keeping the bad parts,» he said. Vourloumis said he expected the European Union to rule in a few months on the Greek government’s plans to shoulder about 4 percent of the related restructuring costs, which he put at a little below 1.5 billion euros ($1.75 billion). If Brussels blocks the compensation plan, Vourloumis said he thought it likely the Greek government could appeal. Nevertheless, he added that the company’s three-year industrial plan, which he said would be presented in December, did not bank on the help. We do not include it (the government involvement) in our projections. If it comes, it will be great,» he said. Takeover speculation has been sparked by a rash of bids, including France Telecom’s bid for Spanish mobile group Amena and Telefonica’s bids for Czech carrier Cesky Telekom and British-based O2.