Greece Sells Gambling Company

ATHENS--Greece's government Wednesday accepted a 652 million euro ($860.3 million) bid for the state gambling company OPAP SA (GRKZF, OPAP.AT), marking the first significant asset sale in the country's long-delayed privatization program.

In a statement, Greece's privatization agency said that a Czech-led private equity consortium, Emma Delta, had won the bid for the acquisition of a 33% stake of OPAP, after improving its earlier bid by EUR30 million to meet the government's minimum target price.

Greece will also retain 2012 dividends from the company, equal to EUR60 million, bringing the total bid up to EUR712 million, the statement adds.

"The first big privatization in our country was completed successfully today," finance minister Yannis Stournaras said in a statement.

The Emma Delta consortium is 66.7% owned by Jiri Smejc, a partner in Czech private-equity fund PPF, and 33.3% owned by Greek businessman George Melissanidis, analysts say.

The bid needs to be reviewed by Greece's Court of Auditors, the agency said, a procedure that could take several weeks.

OPAP marks the first significant privatization Greece has undertaken since the start of the crisis in 2009. The state-backed gambling monopoly--together with gas company DEPA--constitute two of the jewels in the country's privatization program, analysts say. But despite that, OPAP drew only two final bidders and the price of the final bid was at the low end of what the government hoped to receive.

The privatization of DEPA and its gas network operator, DESFA--with bids expected around May 10--is also seen as a significant test of foreign investors' interest in Greece. So far, in initial rounds the gas companies have drawn interest from five different investors from Russia, Greece and Azerbaijan, but it remains unclear how many will submit final binding offers.

Earlier this week, Greece's privatization agency received initial expressions of interest for a water utility in northern Greece, Thessaloniki Water Supply and Sewerage SA (EYAPS.AT), or EYATH. The privatization of EYATH--although much smaller in scale--did draw interest from strong strategic investors, including France's Suez.

Greece has only raised about EUR2 billion from privatizations since its first bailout loan in May 2010 and missed last year's initial goal of EUR3 billion. This year it hopes to raise EUR2.6 billion.

The privatization of DEPA and DESFA, along with OPAP, could cover most of that amount.

The country's early goal of raising EUR50 billion by 2019 has repeatedly been scaled back. It now aims for EUR11.1 billion in privatization proceeds by the end of 2016, EUR25 billion by 2020 and EUR50 billion over an unspecified time period.

Write to Nektaria Stamouli at [e-mail]

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