ECONOMY

OTE agreement with Deutsche Telekom expected next week

ATHENS/FRANKFURT (Reuters) – Greece expects to finalize a deal with Deutsche Telekom (DT) next week that would allow the German telecoms group to buy a further 3 percent stake in OTE, a Finance Ministry official said. «Next week we will have the final document of the deal, if all goes well,» the official, who requested anonymity, said yesterday after a privatizations committee meeting. «We instructed advisers… to proceed with drafting the agreement,» the official said. Greece and Deutsche Telekom have been in negotiations since last month, trying to hammer out details of the deal which gives the two telecom groups coverage of the entire southeast European telecoms market with both fixed and mobile telephony. Deutsche Telekom said it had not yet reached an agreement to gain management control of OTE. «Currently, we have not taken a decision,» Chief Executive Rene Obermann said yesterday, reiterating an agreement was conditional on Deutsche Telekom obtaining management control. Last month, the German telecoms group agreed to acquire a 20 percent stake in OTE from buyout firm Marfin Investment Group (MIG) for 2.5 billion euros ($3.9 billion). In order to raise its stake beyond 20 percent, DT needs Greek government permission. The committee in Athens approved terms that had been agreed upon so far and empowered advisers to proceed with talks to draw up a final agreement between shareholders, which will be reviewed at a next meeting of the committee, the official added. So far, the two sides have agreed that the chairman of OTE will be chosen by the Greek government while Deutsche Telekom will name the chief executive. But obstacles remain as to which will have the upper hand on crucial decisions. Greece is seeking extended powers for the chairman, while Deutsche Telekom 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. Deutsche Telekom plans to buy a further 3 percent so that both sides have equal shares of the 9.5-billion-euro Greek telecom and together own more than half of the company. However, Deutsche Telekom has reserved the right to withdraw from the purchase of MIG’s shares if no deal is reached with the Greek government.