ECONOMY

Tough negotiations in progress on OTE stake price and CEO’s powers

Hard bargaining continues between the state and Deutsche Telekom (DT) as the German colossus pursues its bid to raise its stake in Hellenic Telecommunications Organization (OTE). Negotiations are now focusing on such thorny questions as the sale price of the stake and the powers of OTE’s chief executive officer. During their meeting yesterday, Economy and Finance Minister Giorgos Alogoskoufis, Communications Minister Costis Hatzidakis and DT vice president Karl-Gerhard Eick agreed that OTE president and CEO Panayis Vourloumis should keep his posts for a one-year transitional period. His competencies will then be shared out, with the state appointing a new president and DT a new CEO. Both appointees will have to be mutually acceptable, with the state and DT reserving the right to veto any choice of person not to their liking. However, talks are continuing on the tougher issues, namely the price which the Germans will have to pay for acquiring a 3 percent stake from the state and the powers of the CEO. The government is aiming for a higher premium that the one secured by Marfin Investment Group when it recently sold its 19.9 percent stake to DT, since in addition to the shares it will also be conceding part of the management. The government will also request a clear description of the CEO’s powers and duties, against a background of criticism that it is handing over OTE’s management entirely to DT, given that it is the CEO who makes the decisions and not the president. Sources from the two ministries said there may be no agreement this week, adding there a new meeting may be held between the two ministers and DT officials.