Chinese companies interested in Greek plan to sell assets

Updated: 2012-12-01 02:54

By HE WEI in Shanghai and ZHENG YANGPENG in Beijing (China Daily)

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High-profile Chinese companies have expressed an interest in Greece's plan to sell off state assets as Athens rolled out its 50-billion-euro ($65 billion) privatization plan in China on Friday in an attempt to attract fresh and long-term investment to revive its recession-ravaged economy.

Greek Vice-Foreign Minister Dimitrios Kourkoulas told China Daily that the country is making bold moves to trim its massive debt burdens and attract investment by privatizing its assets.

International lenders clinched a breakthrough agreement this week to reduce Greek debt by 40 billion euros, cutting its debt level by 11 percentage points of gross domestic product by 2020 through a package of measures.

That has paved the way for a major aid installment needed to recapitalize Greece's government and shaky banks, said Panayiotis Mihalos, secretary-general for International Economic Relations and Development Cooperation in Greece, at an investment forum in Shanghai.

To get the European Union's financial injection, Greece needs to fulfill a series of austerity measures, which many experts said have eroded the vitality of the country's economy.

But according to Kourkoulas, Greece is likely to recover from 2014 on the grounds that structural reforms are being implemented and the government budget may achieve a surplus next year.

Greece has so far achieved the largest and fastest fiscal consolidation in both general government deficit and current account deficit, said Stephanos Issaias, chief executive officer of Invest in Greece Agency, a government-initiated fund management agency.

Besides reform, the Greece government has pinned its hopes on increased exports and foreign direct investment, which Kourkoulas said is the only way to get out of the "austerity-negative growth" cycle.

This includes a proposal to privatize some state assets, which is set to bring in 11.1 billion euros by 2016.

The large-scale privatization program includes hundreds of projects in three categories — land, infrastructure and corporate assets, according to Panos Protopsaltis, manager of corporate planning at the Hellenic Republic Asset Development Fund, an agency supervised by the Greek Ministry of Finance.

Land development projects account for 55 percent of the entire portfolio, whereas the gaming, banking and energy industries help improve the attractiveness of the assets.

The proposal has garnered interests from 50 high-profile companies in China.

Chinese shipping giant COSCO Group has a successful presence in Greece, where it has already run various parts of Greece's largest port, Piraeus Port, for more than two years.

"This is a successful story for both China and Greece. They have been making profits and creating jobs for Greece," said Kourkoulas, adding that COSCO is planning to double or triple its investment in the next year.

Shanghai International Group is seeking opportunities in Greece under the newly established $2-billion Shanghai International Global Acquisition Fund, said Cheng Baoliang, head of the fund.

Cheng found certain business opportunities in Greece highly complementary to the company's ongoing projects in Shanghai, and it has expressed an interest in Greece's tourism and resource sectors.

Shanghai-based Fosun Group, a leading private conglomerate, plans to enter Greece's food and consumer sector, after acquiring a 13.4 percent stake in Greek jewelry and accessories maker Folli Follie Group last year.

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