Greece seals deal for sale of debt-ridden state airline

March 7th, 2009 - 1:01 pm ICT by IANS  

Athens, March 7 (DPA) After years of failed privatisation attempts, the Greek government has sealed a deal with the country’s largest buyout firm, Marfin Investment Group, for the sale of debt-ridden carrier Olympic Airlines, media reports said.
The deal involving Marfin and Swissport, a subsidiary of Spain’s Ferrovial, comes a month after the conservative government made a last-minute appeal for investors to rescue Olympic, after an international tender failed to produce satisfactory offers.

Marfin submitted a 62.4 million euro ($79 million) bid for Olympic’s flight operations and technical maintenance base.

Swissport bid for the ground-handling unit, totalling 44.8 million euros.

Details of the deal were not immediately known but Greek radio reported that Marfin agreed to retain 5,000 of Olympic’s air staff.

The deal was reportedly struck just as the government received two more bids to acquire the airline by Chrysler for 210 million euros, and by Greek private carrier Aegean Airlines.

Although Aegean, which is Olympic’s main competitor for Greece’s domestic routes, offered an attractive proposal of 170 million euros to purchase the ailing airline, many expressed fears that the sale could create a monopoly.

Founded in 1957 by shipping magnate Aristotle Onassis, Olympic steadily declined after being operated for decades by the state, with reported losses of 450 million euros a year.

The government has spent years seeking private investors to take over the airline, but the process has been complicated by the European Commission’s demand that the company repay unlawfully distributed state aid.

The last attempt to privatise the airline was September 2008, when the government floated a tender to split the loss-making airline into three units - flying, ground handling and aircraft maintenance - to facilitate a sale.

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