June 11, 2013 / 10:02 AM / in 5 years

UPDATE 1-Greece to ask lenders to lower asset sale target -source

ATHENS, June 11 (Reuters) - Greece plans to ask foreign lenders to reset its asset sales target as its failure to sell natural gas firm DEPA means it will fall short of its goal this year, a senior government official said on Tuesday.

Greece will miss its asset sale target by roughly 1 billion euros this year after its privatisation schedule was derailed again on Monday when Russian energy giant Gazprom withdrew from the running to buy DEPA.

The sale had initially been expected to raise as much as 1 billion euros and Athens will ask the European Union and the International Monetary Fund to postpone raising that sum to 2014.

“It is very difficult to cover the 1 billion euros we expected to raise from DEPA,” the official told Reuters on condition of anonymity. “We will ask the creditors to push back those receipts to 2014,” he said.

Under the terms of its EU/IMF bailout, Athens has a binding target to raise at least 1.8 billion euros from privatisation revenues by the end of September and an indicative one to raise at least 2.5 billion euros by the end of this year.

However, Athens has fallen well short of all the ambitious privatisation goals it was given since its first bailout in mid-2010. It has raised just about 2 billion euros over the past two years, a fraction of the amounts initially targeted.

It got off to a good start earlier this year by agreeing to sell gambling firm OPAP for 652 million euros.

Gazprom’s surprise withdrawal from the running to buy DEPA, however, left Greece without a single suitor for the firm.

Prime Minister Antonis Samaras ruled out taking new austerity measures to compensate for the shortfall.

“There are many people who say there will be (austerity) measures - it’s ludicrous,” he told a news conference on Tuesday.

While the asset sales targets are binding, Greece is on track to meet its budget targets for this year, which may give it leeway to renegotiate its privatisation goals.

Greek officials have suggested that the European Commission may be to blame for Gazprom’s withdrawal, saying the Russian firm was probably concerned that EU regulators would impose stringent conditions on the deal.

“(Gazprom’s withdrawal) had to do with reasons that were above and beyond us,” Samaras said. The Russian company said on Monday it withdrew because it was worried about the company’s weak finances.

Senior EU/IMF officials are currently in Athens to review implementation of Greece’s reform plan. Deputy Energy Minister Assimakis Papageorgiou said on Monday he did not expect any privatisation shortfall to cause any problems in the talks.

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