Greek Asset Sales Program to Be Delayed Months, Chief Says

Greek Elections to Delay Asset Sales by Months, HRADF CEO Says
Customers look at state lottery tickets displayed for sale at a street vendor's stand in Athens. Photographer: Kostas Tsironis/Bloomberg

Greece’s 50 billion euro ($63.6 billion) state-asset sales program, a key plank in securing international funds from the European Union and International Monetary Fund, will be delayed by months as the country goes back to the polls to choose a new government.

The Hellenic Republic Asset Development Fund said yesterday its board decided to freeze all projects and won’t make any binding decisions until the country holds elections on June 17. That will immediately affect the timetable for the sale of the nation’s gas company, a contract for a state lottery and the lease of the IBC conference center, said Costas Mitropoulos, chief executive officer of the fund.

“We had expected that the state lottery first of all, and then IBC, and then the gas company DEPA, would be completed in the month after the elections,” Mitropoulos said yesterday, referring to the May 6 vote. “It will be definitely a couple of months that we will be losing and that could have a serious impact on the delivery of the program as a whole.”

Greece’s international lenders have already been critical of the slow pace of asset sales, which are designed to pay down debt. The European Commission said in March that the 50 billion-euro figure “remains viable, though over a much longer horizon than envisioned initially.” The target for end-2015 is to raise 19 billion euros.

The observers to the board representing the European Union and the Euro area expressed their concern about the decision, the fund said.

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Fourteen investors, including Azerbaijan’s Socar, OAO Gazprom and Italy’s ENI SpA and Edison SpA, are on the short-list for the sale of the natural gas company and grid operator. Nine groups have expressed interest in investing in the development of the former Athens International Airport, while Greek and Austrian companies are bidding for a tender to run and operate state lotteries.

Such asset sales have long been troubled in Greece, subject to political disputes, opposition from unions and complicated by bureaucratic problems such as a lack of deeds for real estate. The leader of the second-biggest party from the inconclusive May 6 elections, Alexis Tsipras, yesterday demanded all sales be frozen. His party, Syriza, wants to cancel the terms of the 130 billion euro international rescue.

“The elections of course may result in a government that would not wish to carry on with the privatization program, in which case this decision is a wise decision,” Mitropoulos said in a phone interview yesterday. “But then there will be no need for a privatization fund.”

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