More state firms to be privatized

One after another, the myths generated in recent weeks about the government’s new privatization program are beginning to dissolve. The first one to go was that of OTE’s rumored merger with Cosmote, which is not going to happen, at least for the time being. Up next is the case of ATEbank. Informed sources in the government suggest that «there is no chance of selling the bank or forging a strategic alliance with any investor, Greek or foreign.» This was expressed in the most emphatic way and is clear enough. «The situation of ATEbank remains exactly as the prime minister has outlined: It will continue to operate as it is and to offer its services as today,» the sources said. This means that the government does not have in its plans any prospect of parting with a majority stake in the bank. On the other hand, no official source will refute the prospect of one or more placements of ATE in the next few months within the context of its gradual privatization. However, even this prospect is not as immediate as the market may think, and at any rate would be limited as the state’s stake in the bank cannot be any lower than 51 percent. That prospect is remote because any such initiative would require a «correction» in the price of the bank’s stock, according to market experts. In the case of Postal Savings Bank (TT), sources suggest that the government has started to make its final decisions: The state at present controls directly 36 percent of the corporation and another 10 percent indirectly, through Hellenic Post. This means it owns 46 percent of the TT share capital. It can almost be taken for granted that in the next few months the government will proceed to one or two more placements within the context of TT’s gradual privatization which started with the bank’s listing. When that will happen cannot be determined yet. However, the first step will be taken soon, but depends on many factors (the general economic environment, stock market conditions etc). The most likely scenario is that at the end of this process, the state will have direct control of 20 percent of TT’s share capital. There are two possibilities for what will happen next: A strategic partner will be sought to acquire the stake, operate as the main shareholder and run the corporation, or the National Bank of Greece model will be followed. In the first option, Economy and Finance Minister Giorgos Alogoskoufis prefers a solution from abroad, as in the case of Emporiki Bank. Yet if this materializes, it will face the strong resistance of the Greek contenders. In Emporiki’s case, the government’s response to the domestic candidates’ pressure was that it did not wish to destabilize the local balance of power on the market. In the second option, the corporation may be fully privatized, but gradually. Unlike Emporiki, in TT’s case, the state may retain a strong stake, not to mention its indirect stake through Hellenic Postal; however its majority ownership will definitely become a thing of the past. The main issue concerning the management of OTE telecom is the question whether it should merge with its subsidiary cellphone network Cosmote or not. The noises coming from the government suggest that at this phase this is not going to happen. «After all, it would not be in the state’s interests for the government to do such a thing, as it would signify the further reduction of the stake it has in the group,» sources say. In any case, though, the same sources add that «it is the management of the corporation and president Panagis Vourloumis who will make this decision.» The first step by the Economy Ministry within the context of the new privatization program will be the sale of Attica Bank, or the forging of a strategic alliance with a Greek or foreign investor. On this occasion, no one will be barred from participating in the bidding. The process is expected to begin soon – definitely before the end of the year. The bank’s management will in the next few weeks choose a strategic consultant who will scan the domestic and foreign market for interested investors and then make some initial proposals to the management and the bank’s main shareholders.