[MGSA-L] Even more Greece for sale .... Greek Privatization Chief Predicts Bonanza

June Samaras june.samaras at gmail.com
Wed Sep 19 22:22:11 PDT 2012


Greek Privatization Chief Predicts Bonanza

Published: Tuesday, 18 Sep 2012 | 2:24 AM ET Text Size
By: Kerin Hope

Greece could become “an El Dorado for investors” as it moves
decisively to sell off infrastructure assets, the new head of the
country’s Privatization agency has said.

Takis Athanasopoulos expects the disposal of DEPA, the state natural
gas utility, and its sister company DESFA, a gas distributor, to
stimulate a drive to raise 19 billion euros ($24.88 billion) by the
end of 2015, as agreed with Greece’s international creditors.

Mr. Athanasopoulos is confident he can pull off the landmark energy
sale by early next year, opening the way for a series of
infrastructure deals that would also create thousands of jobs to
promote economic recovery.

“From now on, we should expect sharp criticism if we fail to
deliver... The prime minister and our [European] partners are pressing
hard for the process to move ahead,” Mr. Athanasopoulos said in a
Financial Times interview.

“If we can change the psychology, Greece could become an El Dorado for
investors. Our advantage is that the country isn’t saturated in any
sector – especially tourism.”

Greece last year undertook to raise 50 billion euros from
privatization's over the next decade as part of a medium-term reform
program agreed with international lenders, but proceeds from asset
sales so far have been modest in the face of opposition from unions,
lawmakers and civil servants.

The Privatization agency’s last boss resigned in July, claiming
investors were losing confidence in the country’s commitment to the
program of disposals.

Mr. Athanasopoulos, a former vice-president of Toyota Motors’ European
division, took over last month as president of the Hellenic Republic
Asset Development Fund, or TAIPED, ending a four-month freeze on
decision-making by the agency’s previous board of directors while
Greece held two general elections.

“We expect four or five companies to reach the final stage and to
conclude a deal by the end of January,” said Mr. Athanasopoulos.

He declined to reveal a price target for the natural gas deal, but
said Greece needed to be pragmatic about asset prices, given an
unprecedented five-year recession and investors’ concern over whether
the country will remain in the euro zone.

“It’s not the best of times for Greece... We have to get over this
syndrome of unease about how long this recession will go on for; how
long the country will remain in limbo [over the euro zone],” he said.

With one in four Greeks unemployed, creating jobs through commitments
to future investment by asset purchasers has become more important
than revenues from sales of state-controlled companies and long leases
on state infrastructure assets. The finance ministry has announced
that it wants to attract three euros of investment for every euro of
Privatization income.

Mr. Athanasopoulos is trying an innovative approach to overcoming
dozens of regulatory and administrative obstacles that discouraged
potential investors during previous Privatization efforts – making a
written agreement with each ministry involved in the process. He said:
“Each list of measures that have to be taken is included in the
ministry’s business plan, and can be referred directly to the prime

TAIPED’s portfolio includes several Greek utilities listed on the
Athens stock exchange [.ATX  Unavailable      ()  	 ] and hundreds of
buildings and plots of land, including some prime coastal sites. It is
adding 12 ports with potential for commercial or tourist development,
including facilities on the islands of Corfu and Crete that could
become hubs for cruise ship operators, and about 20 regional airports
that could be upgraded to handle charter flights year-round.

More on CNBC.com
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Privatization Drive, Shortlists Property Bidders
However, Mr. Athanasopoulos concedes that only two deals are likely to
be wrapped up this year: the sale of a 90-year lease on the former
Olympic international broadcasting center, now a shopping mall with
space for building entertainment facilities; and the disposal of the
Hellenic State Lottery. The two privatization's would together raise a
modest 300 million euros.

The biggest test for Mr. Athanasopoulos will be to push through the
sale of a company set up to develop Hellenikon, the sprawling coastal
site of the former Athens international airport.

Abandoned for almost a decade, apart from briefly hosting a few sports
venues for the 2004 Athens Olympics, the site is seen by planners as
potentially the largest urban regeneration project in Europe. But its
scale, with costs estimated at 6 billion-10 billion euros, makes it a
daunting prospect, even for big international property developers.

Four bidders – Qatari Diari Real Estate Investment, London & Regional
Properties based in the UK, Elbit Systems of Israel and Greece’s Lamda
Development – are participating in the second phase of the tender, due
to be completed in 2013.

“This would be a long-term project, to be developed in several phases,
that would make a real contribution to restoring growth,” said Mr.

Copyright 2011 The Financial Times Limited


June Samaras
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