February 7, 2015 / 12:25 PM / 6 years ago

Germany's Fraport expects Greece to honour airport deal

FRANKFURT, Feb 7 (Reuters) - German airport operator Fraport expects Greece’s new government to honour a $1.4 billion deal for Fraport to run 14 regional airports, its finance chief said on Saturday, in contrast to other key privatisation projects halted by Athens.

When Greece’s leftist-led, anti-austerity government took power in January, it stopped the sale of the country’s biggest port, spooking markets and alarming foreign investors.

Its new leaders are also trying to renegotiate Greece’s huge loans before its bailout expires at the end of the month, and there are growing fears it could be forced out of the euro zone, which some predict will be a catastrophe for the country.

But Fraport believes a possible exit from the euro could benefit the Greek economy in the long term as it would boost tourism, Matthias Zieschang told German financial paper Boersen-Zeitung in an interview.

Zieschang said Fraport expects to close its agreement with Athens as planned in October, under which it will lease and operate 14 regional airports along with Greek energy firm Copelouzos.

Fraport’s 1.2 billion euro deal with Copelouzos, agreed with the Greek privatisation agency in 2014, to run airports in popular tourist destinations like Corfu, was one of Greece’s biggest privatisation deals since the crisis.

“There is a clear timeline with the goal that we close in October this year,” Zieschang told German financial paper Boersen-Zeitung in an interview. “We expect that we will conclude this contract.”

Should Greece leave the euro, it would be difficult at first, Zieschang said. But in the long term, assuming that the Greek national currency would be devalued versus the euro, Greece could gain a competitive pricing advantage, he said.

Final details of the Greek airport contract have yet to be concluded, he said. Fraport expects to hold at least a two-thirds stake in the project, he said.

Weakness in the Russian rouble resulting from that country’s conflict in Ukraine has hit Fraport’s operations in St Petersburg and in popular Russian destinations like Bulgaria and Turkey, Zieschang said, as once big-spending Russian tourists exercise more caution.

Fraport has no current plans for major acquisitions, he added.

Greece has signed privatisation deals worth about 5.4 billion euros, raising about 3 billion euros in cash, since it was bailed out four years ago by the European Union and International Monetary Fund. ($1 = 0.8834 euros) (Reporting by Thomas Atkins; Editing by Raissa Kasolowsky)

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