Olympic bid falters

The only bid for a majority stake in ailing state airline Olympic Airways was close to unraveling last night as the bidder, the Integrated Airline Solutions Consortium (IASC), appeared unable to come up with 102 million euros as a guarantee of its solvency. Embarrassed government ministers were clinging to the hope that IAS would somehow come up with the money by Monday to keep its bid alive. Otherwise, the debt-ridden and overstaffed airline would remain at the hands of the state – a most unwilling owner. Yesterday was the last in a long line of shifting deadlines for the IASC to come up with the sum, which is to be put in an escrow fund. Although IAS claimed that it had provided «proof of funds» to the government’s privatization advisers Credit Suisse First Boston (CSFB) late on Thursday, Transport Minister Christos Verelis told a radio station yesterday that IASC had still not made the deposit that would prove «that the consortium can invest in Olympic.» «If (the guarantees) are not deposited by this evening, negotiations will be suspended,» Verelis said. A more flexible wording was used by officials later this evening: the minister would «wait for the adviser’s report on Monday before deciding,» implying a de facto extension of the deadline. A CSFB spokesman, Jan Vonder Muehll, contacted by Kathimerini in London, said he was not aware of any such deadline. This flexibility increasingly looks like desperation, as the government is faced with the prospect of the talks collapsing. An early favorite in the bidding process, which began in the first half of 2001, Cyprus Airways, dropped out; the next favorite, Axon Airlines, a private airline much smaller than Olympic, suspended operations in November. IASC is a shifting coalition of businessmen, with only Pavlos Vardinoyiannis – with a 90-percent stake – and Olympic’s pilots’ union remaining at the moment. The latest bailout was by northern Greek businessman Dimitris Fessas, best known as a tobacco exporter, who, according to IASC sources, withdrew on Thursday. Economy and Finance Minister Nikos Christodoulakis is said to be searching for businessmen willing to invest in case the IASC bid collapses. The government does not want to be seen as unable to pull off privatizations and investment deals. It is in negotiations to salvage another troubled privatization, that of Hellenic Shipyards, where the bidding winner is threatening to pull out. Yesterday, it appeared that the government had succeeded in salvaging one of the biggest investments ever, that of Canadian mining group TVX, giving the company the go-ahead.

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