Greek Government keen to expedite OTE deal with Deutsche Telekom March 26, 2008Posted by grhomeboy in Telecoms.
Tags: Greece, News, OTE, Telecoms
Equal equity and management shares; unions cagey about job assurances > OTE workers raised the German flag to protest plans for a DT share in management.
Consultations are gathering pace for the finalization of a deal between the government, OTE telecom’s main shareholder, and Deutsche Telekom (DT), which last week agreed to buy a 20 percent stake of OTE from buyout firm Marfin Investment Group (MIG). The talks concern DT’s possible purchase of a further stake from the government, which now owns about 28 percent.
Economy and Finance Minister Giorgos Alogoskoufis told Eleftherotypia newspaper on Sunday that the government was also willing to share the management of the country’s largest telecommunications company but the form it may take would be determined by the negotiations.
The government is anxious for a speedy conclusion, fearing union opposition and stock market speculation in OTE shares. Yesterday, investment bank Credit Suisse downgraded OTE’s target share price from 26 euros to 22.50. Officials are apprehensive that any sharp decline in the OTE share price would undermine the DT-MIG agreement and scuttle any further developments.
Meanwhile, OTE unions (OME-OTE) began preparing protests against any deal with DT, fearing it may jeopardize jobs in future. A three-day strike is due to begin today. At a meeting on Saturday, OTE CEO Panagis Vourloumis assured unionists that legislation passed last year, which obliges the government to keep a minimum 20 percent share, also provides for no dismissals. Earlier on Friday, Alogoskoufis told OME-OTE officials that the government’s intention was to keep a 25 percent stake plus one share, on a par with DT, which would make them equal partners.
He also said both sides would have veto rights protected by legislation. Alogoskoufis added that the Germans had proposed retaining Vourloumis as CEO, with which the government agreed. Vourloumis urged the unions to refrain from strikes, as this would only benefit competitors, and said the deal would improve OTE’s future prospects.
OME-OTE pressed Alogoskoufis for a separate agreement on job security, to which they would be a party. The Minister referred them to Vourloumis, who said this was a matter to be decided by the new management that would emerge from negotiations. It was after this that the three-day strike was called.
The Ministerial privatizations committee is meeting either today or tomorrow to appoint the government’s consultants who will negotiate with the Germans. It is considered likely that UBS, Credit Suisse and Eurobank will be retained, as they are already well acquainted with the matter.