ECONOMY

Greece a springboard for Dubai spending spree

Armed with the business smarts of Greek shipowners and plenty of cash from the Arab emirate of Dubai, a new conglomerate named Marfin Investment Group has been taking the Balkans by storm in a string of high-profile buyouts. Better known as just Marfin – or MIG for short – the group has risen from humble origins as a small Greek bank to invest -5.2 billion ($7.7 billion) in Greece and Cyprus. The group also made shock waves in Greece this summer when it grabbed hold of the country’s largest dairy and food group Vivartia and dominant ferry operator Attica. Funds were also poured into the health, tourism, real estate and information technology sectors, with MIG now controlling a hospital and maternity clinics in Athens, a top Athens shopping mall, the Patras casino, the Nicosia Hilton in Cyprus and Greek IT firm Singular Logic. «In the next two years, we are going to invest another -10 billion in Hungary, Ukraine, Russia, Siberia, the Balkans and Mediterranean countries,» MIG communications director Serafeim Constantinidis told AFP. The man chosen to oversee the expansion spurt is Andreas Vgenopoulos, a 54-year-old lawyer who earned his spurs working for several large Greek shipping companies before forming Maritime Finance (Marfin) in the late 1990s. Marfin first merged with two other banks – Greece’s Egnatia and Laiki of Cyprus – to form a new lender, Marfin Popular Bank, with over 8.2 billion euros in assets in July 2007. Vgenopoulos next put his old shipping contacts to good use in completing the link between Marfin’s financial arm, Dubai and Greek shipowners to create MIG in early 2007. Dubai Financial Group – a subsidiary of the Dubai Investment Group (DIG) that is the Arab emirate’s global financial investor – directly controls 30 percent of Marfin Popular Bank and around 20 percent of MIG, and Vgenopoulos has been entrusted to helm the Greece-based group for the next five years. Seeking to diversify its economy, Dubai wants to develop the largest bank in Eastern Europe and selected Greece’s Marfin to play the part, said Constantinidis. But MIG’s spending spree has not been universally welcomed in Greece, where any company consolidation is generally viewed with suspicion. And when the group moved on one of the country’s sacred cows – semi-state telecoms giant OTE – the critics had finally had enough. The main opposition socialist PASOK party fired a broadside at the government, accusing the ruling conservatives of leaving Greece’s main telecoms operator «hostage» to foreign interests. «We will not stand for the loss of Greek identity from strategic sectors,» the party said. «This clearance sale of public property to the UAE emirs has to stop,» added the smaller Coalition of the Radical Left party. OTE targeted? Even the government is reportedly uneasy at MIG’s growing presence in OTE, which may tip the balance in a company that runs the nation’s phone network. The Dubai-backed group currently controls 17 percent of OTE and is the second-largest shareholder behind the Greek state’s own 28 percent. Having filled local media with adverts touting its Greek connections under a motto of «MIG – Made in Greece,» the group counters that it has the best interests of its acquisitions at heart. «We are long-term investors, we have no intention to shut down the enterprises we obtain,» its communications director notes. «Greeks have traditionally acted as bankers and financiers in this area. There is historic continuity in our approach,» he adds. In statements earlier this month, Vgenopoulos also stressed that MIG’s strategy is to develop its holdings and that it planned to stay in the country. «MIG is a Greek success and will continue to operate here,» he said.