October 18, 2016 / 3:41 PM / in a year

Greek lawmakers allow state to move ahead with OTE share sale

ATHENS, Oct 18 (Reuters) - Greek lawmakers agreed on Tuesday to remove parliament’s right to veto any change in a shareholders’ agreement controlling telecoms group OTE , paving the way for the state’s sale of a 5 percent stake worth some 200 million euros ($220 million).

OTE is 40 percent-owned and managed by Deutsche Telekom with the state holding a 10 percent stake. The state has the right under the shareholders’ agreement to appoint five members of the 11-member board as well as having the final say over crucial management decisions. The rest of the company is owned by private investors.

Opposition lawmakers had accused the government of planning to sell the OTE shares at a time when stock market prices are very low but Parliament on Tuesday approved an amendment to the OTE shareholders’ agreement, stipulating that any further changes would no longer need its approval.

Under its third international aid programme, Greece has agreed an ambitious privatisation scheme, including the sale of half its shares in OTE. But it first needs to transfer the 5 percent stake to its privatisation agency HRADF.

HRADF will then proceed with the sale but the timing is still unknown and Deutsche Telekom has a right of first refusal on any offer.

“We are not fire-selling. A 5 percent stake will go to HRADF,” Finance Minister Euclid Tsakalotos said, adding that the privatisation agency will not rush to sell the holding but will choose the appropriate time to do so.

OTE, which also operates in Romania and Albania, is Greece’s second biggest listed company with a market value of 4 billion euros ($4.4 billion). A 5 percent stake in the group could bring in some 200 million euros to the state’s coffers.

OME-OTE trade union, which represents 14,000 workers in OTE, opposes the sale, saying Greece will lose control of a strategically important company. It met on Tuesday to discuss possible industrial action.

Privatisations, a key plank of Greek international bailouts since 2010, have reaped just 3.5 billion euros so far versus an original target of 50 billion euros, due to political foot-dragging and a highly unionised public sector.

Greece has to raise 14 billion euros by 2022 to cut its debt, the highest in the euro zone as a percentage of gross domestic product, and help revive its ailing economy after seven years of an austerity-induced recession. ($1 = 0.9114 euros) (Reporting by Angeliki Koutantou; Editing by Greg Mahlich)

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