ECONOMY

Gov’t ready to thwart MIG’s OTE ambitions

The government is seeking to buttress its defenses to prevent buyout fund Marfin Investment Group (MIG) from further enlarging its stake in OTE telecom, sources say. MIG, whose major shareholders are Dubai-based investors, has in the last four months acquired a 17 percent stake in OTE through the stock market. The move has been part of a major planned buyout spree in Greece and Eastern Europe, said to have a budget in excess of -10 billion. Earlier this year, MIG carried out a mammoth -5.2 billion share capital increase, the largest ever in Greece. The government, which remains OTE’s main shareholder, controlling a 31 percent stake either directly or indirectly, has so far been unsuccessful in its efforts to find a strategic partner for OTE and has said it prefers a European peer organization as a partner. Economy and Finance Minister Giorgos Alogoskoufis has met twice in as many months with MIG Vice President Andreas Vgenopoulos and made it explicitly clear that the government is against any partnership with MIG. Senior officials are said to have received instructions to examine all alternative possibilities and prepare legal provisions for any eventuality. The general feeling is that the government was almost totally surprised by MIG’s unwanted move. The sources say that one possibility being considered by the government is to reduce by law the required majority of 33 percent for the appointment of the management in corporations (societes anonymes) to 30 percent. It has been suggested that before the proposal is ultimately adopted, feelers should be sent out among the business community to elicit responses, in order to avoid causing unfavorable reactions. The second meeting between Alogoskoufis, Transport and Communications Minister Costis Hatzidakis and Vgenopoulos last Tuesday is reported to have not gone very well. «There was certainly some tension,» an aide to Alogoskoufis told Kathimerini. Nevertheless, it is said that the meeting ended in an agreement that MIG would not proceed with any agressive moves against OTE. If so, this should mean that MIG will not raise its stake in OTE any further, although some maintain that the agreement is for up to 20 percent. On the following day, Wednesday, trading in OTE shares on the Athens bourse included a number of large blocks, the origin and destination of which remain unknown. It is also said that the agreement between the government and Vgenopoulos provides for MIG’s representation on OTE’s board of directors, possibly with two non-executive members. Official statements are expected in the next two weeks.