EAV finances are in dire straits; state firm is seeking loan

Hellenic Aerospace (EAV) faces severe liquidity problems and, according to inside sources, has stopped payments to suppliers over the last few days. The same sources say that state-controlled EAV is urgently seeking a 120-million-euro loan to cover its present needs and to refinance previous loans. In order to get the loan, EAV must have the guarantee of the Greek State, specifically Economy and Finance Minister Nikos Christodoulakis. Sources within EAV say its finances have deteriorated to a point that no alternative to taking out a loan is being considered. This was already apparent at the beginning of the year when EAV had difficulty paying back loans and paying for essential goods and services. The same sources say that an internal memorandum has prohibited any payments except for «operational expenses,» that is, salaries, contributions to employees’ social security and pension funds, and electricity and phone bills. Until recently, EAV used to receive generous downpayments on projects undertaken through the Ministry of Defense. This practice ended when Yiannos Papantoniou replaced Akis Tsochadzopoulos as defense minister in October 2001. DRY CARGO

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