Bloomberg News

Greece Targets 65 Billion Euros From Asset Sales, HRADF Says

November 29, 2011

(See EXT4 <GO> for more on Europe’s debt crisis.)

Nov. 28 (Bloomberg) -- Greece aims to raise 65 billion euros ($87 billion) by the end of 2015 from state asset sales and real-estate redevelopment, Costas Mitropoulos, chief executive officer of the Hellenic Republic Asset Development Fund said.

The success of the fund, which has been set up as a private company, in part depends on the state of international markets as “while investor perception of the value of the assets is high, the money you can currently get for those assets is not as high,” Mitropoulos told South Korean investors at a presentation in Athens today.

Half of the targeted 65 billion euros, up from an original 50 billion-euro goal, will come from real-estate sales or redevelopment, 35 percent of the amount will be from infrastructure concessions or sales, including in 2012 Piraeus, Thessaloniki and 10 other ports, 39 regional airports and stakes in utilities Athens Water and Thessaloniki Water while the remainder will be from company share sales, he said.

The HRADF expects to receive expressions of interest in two weeks from investors who wish to run and operate Hellenic Lotteries, while the fund plans to start in 14 days the tender to develop the site of the former Athens Airport at Hellinikon, south of the Greek capital, and to have a winner by Dec. 2012, Mitropoulos said.

Urban Development Project

“With 600 hectares, Hellinikon is the largest urban redevelopment project in the world,” he said. “The construction costs to build residential and commercial properties, as well as entertainment facilities and a park the size of Central Park in New York, are seen at over 5 billion euros, that is equivalent to 0.2 percent gross domestic product growth over the construction period.”

The fund is currently in negotiations to extend the concession to operate Athens International Airport and for a possible sale of a 30 percent stake in the company. Greece has a 55 percent stake in the airport while Hochtief AG has a 40 percent stake. “These talks are facing some difficulties as Hochtief is selling its airport business, but we are helpful we will conclude a deal with either Hochtief or the new owner,” Mitropoulos said.

By the end of January, the fund plans to announce the details for the privatization of Greek natural gas supplier Depa and its fully owned gas grid operator Desfa SA unit, he said. “We have reached an agreement with Hellenic Petroleum SA for the transfer of the company’s shares in Depa to the fund so that we sell all shares in Depa,” the HRADF head said. Hellenic Petroleum has a 35 percent stake in Depa while the Greek state owns remaining shares.

As well as hiring international advisers for privatization projects, seven experts from the private sector also inspect the projects, Mitropoulos said. “Of these, four are Greek and the other three, who are from Germany, Slovakia and Spain, were appointed by the International Monetary Fund, the European Union and the European Central Bank,” he said.

--Editors: Zoe Schneeweiss, Peter Branton

To contact the reporter on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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