Parnitha Casino stake sold
The government finally approved the sale of a 49-percent stake in the Parnitha Casino to a consortium made up of Hyatt Regency Hotels, operator of a hotel and casino in Thessaloniki, and construction group Hellenic Technodomiki. The consortium had won the bid for the casino months ago, but an unsuccessful attempt by the losing bidder to derail the process and negotiations with the winning bid on improving their offer delayed the decision. Yesterday, the Interministerial Committee on Privatizations approved the recommendation of the privatization adviser and agreed to the sale. The improved sale terms include: an increase in guaranteed total pretax profits over the first five years of operation from 105 million to 135 million euros; a rise in the State’s share of revenue to 31.5, 32 and 32.5 percent for revenues of 200, 250 million and 3,000 million euros, respectively (currently, the state share is a uniform 30 percent); that the winning bidders undertake to cover the next capital increase, to the tune of 10 million euros, giving them a majority stake, and the consortium guarantee at least 850 jobs. The extra concessions are expected to raise the guaranteed annual dividends of Hellenic Tourism Properties, the joint owner and currently the majority shareholder, by at least 28 percent. The state proceeds go directly to the Greek National Tourist Organization (GNTO). The consortium has submitted letters of guarantee on all promised earnings. The second bidder, a consortium made up of Piraeus Bank and Hotel Casino Loutraki SA, had initially submitted a lower bid. After the government declared the Hyatt-Hellenic Technodomiki consortium the winner, it had suddenly submitted a much higher bid and pressured the government to accept it even though it was clearly overdue, hoping that the outcry would bring the government under pressure. Finally, the State Legal Council declared that the bidding process had been completed before this last desperate action and that Hellenic Tourist Properties did not have the right to negotiate with the losing bidder on an improvement on the bid. The government, for its part, used this challenge to persuade the winning bidders to improve their offer.
