April 4, 2018 / 10:40 AM / 3 months ago

Greece says progress in asset sales by June will decide if 2018 target feasible

ATHENS, April 4 (Reuters) - Progress in key privatisations by June will determine whether Greece will meet its bailout target to raise 2 billion euros ($2.45 billion) from state asset sales this year, the head of the country’s privatisation agency (HRADF) said on Wednesday.

Asset sales have been a key pillar of the country’s three international bailouts since 2010 but because sales have been slow proceeds of about 5 billion euros since 2011 are small compared to the initial 50 billion euro target.

The main obstacles have been a national debt crisis, a strongly unionised public sector and a massive bureaucracy.

“The period until June is a quite critical one, which will essentially show whether the 2 billion euro target is feasible,” HRADF’S executive chairman Aris Xenofos told Reuters.

Under its latest rescue programme, the agency has to launch the sale of a 30 percent stake in Athens International Airport and divest a stake in its biggest oil refiner, Hellenic Petroleum.

He said a long permit process from the EU’s competition watchdog has delayed a 480 million euro deal to extend the airport concession for 20 years until 2046, a condition for the sale of the stake in the country’s largest airport.

Discussions should conclude this month allowing the launch of the stake sale, he said.

Hellenic Petroleum announced on Wednesday that its major shareholders, Greece and Paneuropean Oil and Industrial Holdings agreed to divest a combined stake of at least 50.1 percent in the refiner via an international tender.

“A NIGHTMARE”

The leftist-led government was elected in 2015 on a platform of strongly resisting privatisations but was forced to implement an ambitious asset sales programme to sign up to its third international bailout.

Another big ticket is the 99-year lease of a vast seaside property at the disused former Hellenikon airport to a consortium of Arab and Chinese investors led by property developer Lamda.

Action by a plethora of players was needed for the conclusion of the lease, Xenofos said. Greece has agreed with its lenders to wrap up the process by June but Xenofos said that “the most realistic scenario is around the end of the year.”

“All this effort must be intensified on the investors’ side, the involved parties and ministries and us ... so that we can manage and complete all these issues which are an operational nightmare,” he said.

A 17 percent stake in power utility Public Power Corp. (PPC) and minority stakes in Athens and Thessaloniki water utilities EYDAP and ΕΥΑΤΗ <TWSr.ΑΤ> will be tendered in the second half of the year, he said. ($1 = 0.8153 euros) (Editing by Matthew Mpoke Bigg)

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