ECONOMY

Government hardens OTE stance

The government will seek the cooperation of the European Commission to thwart any aggressive buyout moves against large utilities, such as OTE telecom, Economy and Finance Minister Giorgos Alogoskoufis said in Parliament yesterday. «OTE will not be privatized at the initiative of any investment organization, be it a holding company, or a mutual fund or any other agency which does not fulfill the criteria set by the government. We are not discussing the joint management of OTE with anyone,» he said. Coalition of the Radical Left (SYRIZA) deputy Panayiotis Lafazanis criticized the government for failing to prevent the gradual emergence of Marfin Investment Group (MIG) as the second-largest shareholder in OTE after the state with the acquisition of a 17 percent stake within a few months. He wondered how the government will stop MIG from increasing its stake further. Alogoskoufis said the government, which holds a 28 percent share, had a secret plan for dealing with such an eventuality, and would reveal no more at this point in time. «OTE is an organization of strategic character for the development of telecommunications in Greece… Since 2004 we have been applying a specific restructuring plan in order to avert unpleasant developments as in other companies which collapsed when their market opened to competition,» Alogoskoufis said, reiterating that the further privatization of OTE will proceed when the government finds a reliable European telecom company as a strategic partner in expansion. MIG yesterday further raised its stake in OTE to about 19 percent, buying about -50 million worth of shares. Andreas Vgenopoulos, founder of the fund and co-vice chairman, is backed by main shareholder Dubai Group Ltd, a government-controlled investment company in the United Arab Emirates. Challenge Late on Wednesday, the government backed OTE Chief Executive Officer Panagis Vourloumis’s strategy, after MIG called an extraordinary shareholders meeting to challenge Vourloumis over his decision to buy out minority shareholders in mobile operator Cosmote and sell directories unit Infote. The fund said Vourloumis wasn’t consulting with shareholders on critical decisions. »Vourloumis has done great work in reforming OTE and developing it and we have confidence he can continue this in the manner he has done in recent years,» Alogoskoufis said in an interview on Alpha TV. «The government at the moment isn’t examining a change in the OTE board.» Vourloumis, appointed by the center-right New Democracy government in April 2004, has sold units including an Armenian phone company and slashed the work force at OTE to cut costs and shore up earnings. The company’s share price has more than doubled since his appointment. Vgenopoulos said last week he’d like to increase Marfin Investment’s stake in OTE to as much as 20 percent to capture more of its earnings. (Kathimerini, Bloomberg)