Greece is struggling to avoid the collapse of a second big privatisation, amid pressure from bidders for the state gaming monopoly to change terms of a deal agreed last month.
The problems with the €700m sale of OPAP threaten to add to tension with Greece’s international creditors, who fear the slow pace of privatisations will require further more cuts to keep the country’s bailout programme on track.
Emma Delta – a bid vehicle backed by Greek oil tycoon Dimitris Melissanidis and Czech billionaire Jiri Smejc – made the only offer for the Greek state’s 33 per cent holding in OPAP.
According to documents seen by the Financial Times, Emma Delta now wants to cancel two elements of the deal: a three-year, €110m contract with Intralot, OPAP’s Athens-based technology supplier; and a 12-year concession to operate the Greek state lottery in return for a €190m down payment and €50m annually.
The lottery was awarded last year to a consortium including OPAP, Intralot and Scientific Games of the US, the world’s largest lottery software provider. Neither contract has been signed.
Greece’s privatisation agency, Taiped, has rejected formal complaints by Emma Delta threatening to pull out of the deal and take legal action if its demands are not met.
Costas Louropoulos, OPAP’s chief executive, complained in an email seen by the FT that he felt put under pressure by Mr Melissanidis in a series of telephone calls.
“He insulted me, as on many previous occasions … You dare to sign [the Intralot and lottery contracts] and I will take your head off,” Mr Louropoulos quoted Mr Melissanidis as telling him on May 20.
Taiped failed to deliver one flagship privatisation this month when Gazprom unexpectedly pulled out of the bidding for the state natural gas supplier Depa. If the OPAP sale falls through, Greece’s privatisation programme will be in disarray, raising the possibility that the “troika” of international lenders – the International Monetary Fund, European Central Bank and EU Commission – could appoint international managers to replace Greek executives hired by the Athens government to sell €15bn of state assets by 2016.
A review of Greece’s bailout by the IMF this month found that income lost through slippage of the privatisation programme would contribute to a hole in Athens’ budget and “additional financing will need to be identified”.
The disposals of Depa and OPAP were expected to cover about half this year’s €2.6bn target for privatisation revenues agreed with the EU and IMF but failure to sell OPAP would probably to see income from disposals this year fall below €1bn. The target has already been revised downwards twice because of the risks associated with investing in recession-mired, politically unstable Greece.
Taiped has pulled off only one sizeable deal this year: the €400m sale of Desfa, the natural gas grid operator to Socar, the state gas operator of Azerbaijan.
Stelios Stavridis, Taiped’s chairman, insists that the OPAP deal must not be changed. “The country’s credibility is at stake,” he said. “We’ve made clear that we’re responsible people [at Taiped] and that no one can interfere with our work.”
Mr Melissanidis controls Aegean Marine Petroleum Network, a global supplier of marine fuel listed on the New York Stock Exchange. Mr Smejc is the owner of Emma Capital, an investment company, and is one of the largest shareholders in Greece’s Piraeus Bank.
The other partners in the vehicle are also financial investors: Russia’s ICT group, J&T Finance of Slovakia, Czech-based KKCG and Christos Copelouzos, a Greek businessman with ties to Gazprom. Lottomatica, the Italian gaming operator, is also a participant.
Critics of Greek privatisation say the OPAP dispute illustrates how Taiped’s mandate to “sell to the highest bidder” without giving priority to qualitative criteria or operational experience has undermined the programme. “The programme has suffered overall because of a lack of interest from globally recognised players,” said one consultant who declined to be named.
Mr Stavridis, Taiped’s third chairman in less than a year, said he was “cautiously optimistic” about persuading Emma Delta to drop its demands. “We negotiated the OPAP deal in a transparent way and in line with international practice. Now we have to make it stick,” he says.
A spokesman for Emma Delta, on behalf of Mr Melissanidis, declined to comment. Mr Louropoulos could not be reached for comment.
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