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The Globe and Mail

Greek asset sales: Buyers want euro clarity


Fancy buying an abandoned airport site? Bigger than Monaco, and with potential as a marina? Yes? One problem -- it's in Greece. That is the scenario facing the grandly named Hellenic Republic Asset Development Fund, created to sell a €50-billion portfolio of state assets.

Greece needs cash, privatization and foreign direct investment. Until its future in or outside the euro zone is clarified, however, the effort will not attract the interest it deserves.

The site that used to house Athens International airport has attracted some Gulf investors. This week, three expressions of interest were tabled for the sale of a stake in OPAP, the state lotteries. Among the potential buyers are Austrian Lotteries and a consortium that includes Italy's Lottomatica.

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This sale is potentially one of the largest, since Athens-listed OPAP is one of Europe's leading lottery operators, with revenue of €3.2-billion and earnings before interest, tax, depreciation and amortisation of €550-million in the first nine months of 2011 (about 20 per cent below the previous year in each case). And the fund has already raised €1.5-billion from selling telecoms-related licences and rights.

So Greece is not without assets. Some of them will appeal to incumbent foreign companies (such as the telecoms deals) and strategic investors with very long term horizons (hence the wooing of Gulf investors). Costas Mitropoulos, the fund's chief executive, estimates that a credible development plan for the airport site could add a third of a percentage point to annual economic growth for the eight years it would take to build. He is keen to establish some early sales momentum, too.

But the fund's potential will not be realised while doubts about whether Greece can stay in the euro zone persist. Until the exchange rate and denomination risk of buying Greek assets is lifted, the fund will not be able to reach cruising altitude.

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