It didn’t come with the ease of a smooth transaction, but the recent sale of gambling monopoly OPAP to Czech-Greek consortium Emma Delta could pave the way for Greece to seriously start making reforms in an effort to turn its depleted economy around.
At least that’s the thought of Greece Prime Minister Antonis Samaras, who believes that the sale of OPAP represents something far bigger that just the €712 million transaction price Emma Delta paid to acquire a 33 percent stake in OPAP.
The biggest takeaway with the privatization of OPAP, according to Aggelos Tsakanikas, research director for the Athens-based Foundation for Economic and Industrial Research, is the impact it could have to foreign companies who now see the country as being open to investors.
“It is important as a signal to the international community and markets that the privatization program is moving [forward],” Tsakanikas told SETimes.
The negotiations between the Greek government and the Emma Delta didn’t come without any back and forth discussions. Initially, the latter offered 622 million euros only to have it sent back by the government. After more discussions, the two parties finally settled on €712 million, which includes €622 million paid in a lump sum as soon as the agreement had been signed; €60 million that would represent the state’s dividend for 2012; and finally, €30 million that will be paid over the next decade.
As agreed upon, the deal with Emma Delta is a boon for Greece, in large part because it stands to get more through privatization compared to what it would have gotten if OPAP continued to run as a government-owned monopoly. “If OPAP wasn’t privatized, the state would collect a dividend for the 2013 financial year of just 13 million euros, and over the next decade it would get no more than 360 million euros, which is about 50 percent of the amount it is getting through the privatization,” the Hellenic Republic Asset Development Fund said.
The big picture ramifications will be felt in the long run, something analysts believe are as important as the sale price the government managed to get out of the deal with Emma Delta. Confidence in the country is the most important thing for the government now. If foreign companies are still apprehensive about doing business in the country, the OPAP deal is a clear indication that Greece is finally determined to adopt and implement the necessary reforms needed to give it a new lease on life.
“The climate in Greece is changing and hopefully foreign investors will appreciate it and will choose Greece as a place to make business,” Antonis Klapsis, head of research for the Konstandinos Karamanlis Institute for Democracy in Athens, said.
The sale of OPAP was the first step. The next step, despite being much more difficult at this point, is to convince other foreign investors to do the same.