Publications

Greek Chapter to Euromoney's "International Privatisation" (Review 2001/2002).

GREECE

Dimitris E. Paraskevas

Elias Paraskevas Attorneys 1933

From its initiation in the 1990s, Greece’s privatisation programme has raised approximately USD10bn. Following the successful convergence of the economy and the satisfaction of the Maastricht Treaty criteria, Greece became the 12th member of the euro area in the beginning of 2001. Major infrastructure projects have been completed. The highway network has increased from c. approximately 260 km in 1993 to c. approximately 800km in 2001. The €2bn new Athens underground are two characteristic examples of recent development. In the last two years, there was an influx of over USD1.6bn in Foreign Direct Investment (FDI) and another USD16bn in the form of inward portfolio investment. Greek firms invested more than USD2bn in neighbouring countries, taking advantage of Greece’s important participations in the economic reconstruction of the wider Balkan area. In contrast, the Athens stock market suffered a crisis which comes to a head in 2000, leading to the rescheduling of a number of major privatisations, which are programmed to take place in 2001/2002.

This article aims to present an outline of the privatisations law in Greece and the recent changes enacted, the transactions concluded during the year 2000 and the beginning of 2001 (Table 1), and future privatisation project (Table 2).

PRIVATISATION LAW

The legal framework governing privatisation was introduced with Law 2000/91, which has been amended from time to time, most recently by Law 2843/2000.

The competent authority operating the procedure is the Interministerial Committee for Denationalisation (hereinafter referred as DEA), which is made up of the Ministers of National Economy, Finance, Development and the relevant Minister for every specific public undertaking under privatisation, if other than the permanent members of the committee. The DEA selects the selects the undertakings to be privatisation submitted by the supervising Minister(s) of the specific undertakings (Article 3 Para. 1)

A public undertaking may be privatised by means of one of the following methods, or a combination thereof:

• sale of all or part of the shares of the undertaking, having the form of a societe anonyme or a limited liability company;

• listing on a stock exchange and sale of all or part of the shares;

• sale of the assets and liabilities or of divisions thereof;

• lease of the assets and liabilities or of divisions thereof, with or without a shares call option right for a certain time period and/or simultaneous specification of the purchase price;

• award of the management, with or without a shares call option right for a certain time period and/or simultaneous specification of the purchase price;

• swap of all or part of the shares of a public undertaking with the shares of a privately owned undertaking (this is the latest development, introduced with Art. 29 Para. 3 of Law 2843/2000 on ‘modernisation of stock exchange transactions, listing of shipping companies and other provisions’).

The strategic planning, financial, legal and technical advice as well as the marketing of the privatisation is carried out by a financial advisor who is appointed by the DEA.

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The decision on the selection of the preferred bidder or the annulment of the awarding process is taken by the government entity that acts as seller, following a relevant proposal of the DEA (Article 6 Para, 1a).

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OTHER RELEVANT LEGISLATION

The legislation enacted during 2000 deals with the deregulation of the telecom and electricity markets and the further reduction of the minimum state-owned shareholding limit in certain public undertakings, in order to enable further privatisation of such undertakings. The enacted legislation in the public sector may be summarised as follows:

Electricity

Law 2733/1999, which was published in late December 1999 but came into force during 2000, provides for the deregulation of the electricity market in Greece. The Public Power Corporation S.A. (DEH) will no longer be the exclusive producer and provider of power in Greece and the consumers (initially the large ones, such as industrial plants) will have the right to select their power provider.

The granting of licences to the new power providers as well as the supervision of the operation of the electricity market will be concluded by an administrative authority. Regulator Power Authority, made up of five members who report to the Minister of Development. This Authority has recently granted the first six licences for the establishment of privately owned power providers (ENELCO, AA-Holdings, TERNA-GEK, MYTILINEOS S.A., Hellenic Petroleum, ENELCO EVROS).

In accordance with the Presidential Decree 328/2000, the power distribution system will be operated by a societe anonyme. Operator of the Greek Power Distribution System S.A., of which a 51% shareholding will belong to the Greek State, with the remaining 49% belonging proportionately to DEH and the private power providers.

Following the enactment of the Presidential Decree 328/2000, the minimum state-owned shareholding limit in DEH was reduced from 75% to 51%, opening the way for the privatisation of the company in 2001, initially scheduled to take place during 2000. Goldman Sachs and N. M. Rothchild & Sons have been appointed to advise on this transaction.

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Telecommunications

The deregulation of the telecom market was introduced with Law 2867/2000. The main issues of this Law include:

• The monopoly of Hellenic Telecom S.A. (OTE), which was responsible for the instalment, operation and exploitation of the public telephone network, was terminated on December 31, 2000. The operation and supervision of the telecom market is exercised by the National Committee of Telecommunications and Post, an administrative authority constituted of nine members who report to the Minister of Transport. The minimum state-owned shareholding limit in OTE was reduced from 75% to 51%, in accordance with the provisions of Law 2843/2000. Nevertheless, an attempt at a strategic alliance with a private investor during 2000 was not successful, party due to the general unrest in the sector. Credit Suisse First Boston has been appointed to advise on the further privatisation of OTE.

• Law 2867/2000 provides that Hellenic Post (ELTA) and its courier subsidiary, Tachymetafores ELTA S.A. will not be governed by any of the regulations referring to undertakings of the public sector, as of January 1, 2001. Further minimum state-owned shareholding limit in ELTA was reduced from 75% to 51% (Law 2843/2000). A 25% shareholding of ELTA and a 50% of Tachymetafores ELTA S.A. are in the process of being privatised, with and N. M. Rothchild & Sons advising.

Football prognostics

Law 2843/2000 provided for the initial public offering of a maximum 49% shareholding of the public undertaking entitled Football Prognostics Organisation S.A. Alpha Finance S.A. acted as underwriters.

Casinos

The establishment of a societe anonyme aiming exclusively at the management an exploitation of all property belonging to the casinos of Parnitha and Corfu, was the first step towards the future privatisation of the two casinos (Law 2837/2000). Shareholders of the abovementioned societe anonyme are the Greek State as well as Hellenic Tourist Property S.A.

Following a recent resolution (March 2001) of the Minister of Development, two subsidiaries of Hellenic Tourist Property S.A. will undertake the management of the casinos as well as the listing of the casinos on the Athens Stock Exchange.

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