Friday, Dec 07, 2007
(Adds comments from European Commission and Greek Finance Ministry)
ATHENS (Dow Jones)--Greek Finance Minister George Alogoskoufis Friday said legislation submitted to parliament would require private investment of 20% or more in companies judged to be of "strategic importance" to secure special authorization.
Under the new measures, would-be investors in these cases will have to apply for approval by the interministerial privatization committee. The measures are applicable to "strategic" companies with features of a monopoly, and companies managing nationwide infrastructure networks, according to the text of the draft legislation.
A company looking to acquire a stake of 20% or more in such an enterprise will be required to have experience in the sector in which it operates. It will have to provide evidence that it is solvent, and information on its investment strategies, the structure of its share capital, and its shareholders outside the E.U.
Alogoskoufis said at a press conference that within the European Union, the privatization of such companies usually involves a "control process and the protection of national and social interests."
The new legislation also stipulates that certain decisions taken by companies of strategic importance for the national interest will need the finance minister's approval.
The measures are in force as of Friday, Alogosoufis said.
His statement followed speculation in the Greek press that the government plans to shield former monopoly operator Hellenic Telecommunications Organization SA, (OTE) from takeover by Greek private equity firm Marfin Investment Group SA (MIG.AT).
Marfin Investment is already the second-largest shareholder in OTE after the Greek state, with a stake of 18.46%, after its share purchases of recent months. It has previously said it aims to control 20% of the company.
The Greek government still controls 28.03% of OTE, but has said it is looking for another European telecoms operator to step in and acquire this stake as a long-term strategic investor in OTE.
MIG share purchases have raised concerns that MIG, with no telecoms experience, may not offer OTE much in terms of management or technical expertise. The Greek press has also speculated that the government's reluctance to sell its remaining OTE stake to MIG also stems from the fact that MIG's shareholders include Dubai Financial Group, an investment holding company of the state of Dubai.
MIG's management had stated several times that it would support the government's plans for OTE.
MIG raised EUR5.19 billion earlier this year for investment in Greece, Cyprus and southeastern Europe, and has acquired stakes in several companies in Greece.
Dubai Financial Group has a 9.6% stake in MIG, but has said it wants eventually to hold 20%.
MIG said Friday that "it has no comment" on the bill. It is scheduled hold a press conference Monday.
At European Union level, the Greek bill could run afoul of principles of free movement of capital. However, in a statement Friday the Greek Finance Ministry said the legislation fully complies with E.U. regulations.
Following the news, both OTE and MIG shares closed down in Athens Friday, 4.8% and 3.7% lower respectively, in a general market that closed slightly higher.
Company Web sites: www.marfininvestmentgroup.com; www.ote.gr
-By Ayse Ferliel, Dow Jones Newswires; +30 210 331 2881; ayse.ferliel@dowjones.com
(Katharina Bart in Brussels contributed to this story.)
Copyright (c) 2007 Dow Jones & Company, Inc.
(END) Dow Jones Newswires
07-12-07 1723GMT
