Following an announcement last week concerning the government’s plans to revive its stalled privatisation programme, it became known that Greece’s monopoly utility, the Public Power Corporation (PPC) was to go ahead with the sale of a third tranche of its stock later this year. A first tranche of the company was sold in December 2001 through a sucessful IPO in the Athens and London exchanges and a second one, again through ASE, in december 2002. The Greek state now controls 71,22% of PPC’s stock and according to government sources a further 10 % is likely to be sold to the public before the end of the year.
The government views PPC as part of a broader state company package, including lottery and soccer pool company OPAP, which should be sold over the next few months to raise much needed funds in order to cut down the country’s external debt.
“A tranche of OPAP shares will be sold on the Athens Stock Exchange in June and PPC equity subsequently, which should raise a total of 1.2 billion euros to 1.3 billion euros,” Deputy Finance Minister Giorgios Floridis told reporters last week. The government’s target of raising 2.99 billion euros from the sale of state-owned enterprises this year suffered two serious setbacks earlier in the year after it failed to find buyers for debt-burdened flag carrier Olympic Airways and sell a 23 percent stake in oil refiner Hellenic Petroleum.
Despite the two disappointments, the government is not thinking of revising the projected privatization revenues. The disinvestment programme raised 1.93 billion euros for state coffers last year, equivalent to 1.4 percent of GDP. This year’s targeted proceeds of 2.99 billion euros is estimated to amount to 2 percent of national output.
Analysts point out that if the government is serious in its efforts to reduce the country’s substantial public debt and bring it down to 100% of GNP, compared to 105% which is at present, it will need to go ahead with an extensive sale of state controlled assets before the end of the year. In order to achieve this goal, which is in line with the EU convergence requirements, it will need to organise disposals ro the tune of 7.0 billion euros.However, the present economic climate both in Greece and in Europe is not conductive for such type of large scale asset sales, point out market sources in Athens.