ECONOMY

OTE talks to continue; no agreement yet

Advisers to the government and Deutsche Telekom (DT) failed to reach a deal on the sale of a government stake in OTE telecom yesterday but talks will continue, a senior government official said. Greece and DT have been in negotiations since last month, trying to hammer out a deal that would see the two groups covering the Balkan telecoms market with both fixed-line and mobile telephony. The two sides face a May 7 deadline for talks to reach an agreement. «The advisers met today. We have many days left ahead of us to reach a deal,» said a senior Finance Ministry official who declined to be named. «The deadline for an agreement to be reached still stands.» The government’s advisers met with the country’s finance and transport ministers to brief them on the outcome of yesterday’s talks with DT. Greece is being advised by Credit Suisse, UBS and EFG Eurobank on the deal. DT has agreed to buy a 20 percent stake in OTE from buyout firm Marfin Investment Group (MIG) and is in discussions with the government, which owns 28 percent, to buy another 3 percent from the state and secure management control. The sought-after deal comes during a period of consolidation in the European telecoms sector, as bigger groups seek scale and growth in the mostly mature markets of Europe. OTE is present in Bulgaria, Serbia, Romania and Albania. So far the two sides have agreed that the chairman of OTE will be chosen by the Greek government, while the chief executive will be picked by DT. But obstacles remain on who will have the upper hand in crucial decisions. Greece is seeking extended powers for the chairman, while DT has sought further authority for the CEO. Both sides have agreed that current CEO and Chairman Panagis Vourloumis will stay on for a transitional period. DT has already agreed to buy a 20 percent stake in OTE from MIG at 26 euros a share or 2.5 billion euros. In order to raise its stake beyond 20 percent, DT needs government permission, according to a recent Greek law. However, DT has reserved the right to withdraw from the purchase of MIG’s shares if no deal is reached with the Greek government. (Reuters)