Gov’t considers next moves in privatization program
The government is looking into the further privatization of public holdings and companies, in an effort to attract private capital that will both contribute to state coffers and bring about qualitative changes in the Greek economy. According to sources, the Economy Ministry is planning to seek strategic investors for mining company Larko and the horse-racing organization (ODIE), along the lines of the privatization of Emporiki Bank last year, in which France’s Credit Agricole acquired a strategic stake. In both cases, the entry of a strategic investor will involve the acquisition of a stake in the companies and participation in, or even the full concession, of management. Foreign investors are said to have already expressed interest in Larko, which, despite high debt liabilities, has benefited from the recent steep rise in the world price of nickel. Larko is 35 percent-owned by the government, with Public Power Corporation (PPC) and National Bank of Greece holding 28.5 percent and 36.4 percent respectively. ODIE is 100 percent state-owned. Well-informed sources said the privatization of Larko and ODIE could take place within 2007. For Larko in particular, the favorable conditions on the world market are considered a plus for its successful privatization. The company is the sole producer of nickel in the European Union, mining 2.63 million tons of iron-nickel ore from which about 18,000 tons of iron-nickel metal are produced annually. ODIE is Greece’s sole horse-racing operator, with 99.5 percent of its revenues coming from betting on the races. Additionally, it owns 110 hectares in Markopoulo, east of Athens, of which its installations take up about half; the rest is considered likely to attract significant investment interest. The company is projected to achieve strong profitability this year, which could grow further with the right business plan, it is argued. ODIE has also commissioned a study for the creation of a second racetrack in northern Greece. Apart from Larko and ODIE, the government is soon expected to announce its intentions regarding the privatization of Postal Savings Bank (TT). Sources say there will be a 15-20 percent placement on the stock market, from which the government is estimated to raise about 400-500 million euros. Today, the government and state-owned Greek Postal Service control a combined interest of 65 percent in TT. Developments are expected after the announcement of TT results later this month. As regards OTE telecom, the government has given an extension to the deadline for expressions of interest by potential foreign strategic investors, who would also have a share in management. If the invitation finally proves fruitless, the most likely option is considered the private placement of 10-15 percent through the stock market.
