Olympic Airlines set to go into private hands

THE Greek government has reached a preliminary agreement to sell Olympic Airlines, the country’s unprofitable national carrier.

On the recommendation of sale advisers, a ministerial committee “approved a memorandum of basic positions between the Greek state and the York Capital/Olympic Investors group,” said the Economy and Finance ministry.

The memorandum’s signature “opens the way” for the company’s sale, which “continues to depend on European Union decisions”, the statement said, without giving further details.

Olympic Investors is a group of Greek-American investors. The Greek government, which has been trying to sell the carrier since 2000, said this is the last chance for a sale to save the airline. Its losses have cost taxpayers more than €2 billion in the last decade.

In March 2004, the EU opened an inquiry into whether the planned privatisation offered the carrier unlawful advantages. Formed from bankrupt predecessor Olympic Airways, the company lost €87.1 million last year and must return €194 million in state aid.

Investment bank Lazard LLC is advising on the sale, aided by Greek investment banks Alpha Finance, Emporiki Investment Bank and National Bank of Greece.