Deadline nears for Greek shipyard

Date: 05/10/1995

THE European Commission will decide next week whether to clear the Greek government's plan to sell half of its largest shipbuilding company to its workforce, so clearing the way for a possible German consortium bid to manage the yard.

A veto from Competition Commissioner Karel Van Miert at the 10 October meeting of the Commission would mean the closure of the loss-making Hellenic Shipyards at Skaramanga to non-military work and the forced repayment of 270 million ecu of illegal subsidies.

After a week of intense negotiations with DGIV, the Directorate-General for competition, Greek officials say they are “cautiously optimistic” that clearance will be forthcoming.

The government is already talking to German naval shipbuilder Howaldtswerke Deutsche Werft (HDW) who, together with partner Blohm + Voss AG and perhaps two other firms, are considering a bid to manage the semi-privatised yard.

The government will sell 49&percent; of the state-owned company to the 3,000-strong workforce. Workers will pay 27 million ecu for a stake in annual instalments, to be deducted from their salaries and bonuses from 1998 onwards. The government will hang on to a 51&percent; shareholding.

If Van Miert does give the go-ahead, it will be a turn round from his attitude of only two weeks ago. He has been pressing for a solution to the Skaramanga problem for more than two years. The yard is being kept alive solely through state subsidies and has incurred a loss to the Greek taxpayer of 60 million ecu last year alone. Yet, it continues to work on orders worth 7.9 million ecu.

In March 1993, the Commission decided this situation could not continue and ordered the Greek government to close the yard to civil work. A series of extensions to the deadline were allowed as Athens claimed to be searching for potential buyers.

The only offer came from shipping firm Peraticos, which bid 245 million ecu jointly with HDW. The bid was rejected by Industry Minister Costas Simitis, who claimed to have found a higher offer from a consortium of major Japanese, Norwegian and Israeli firms.

“The bid was a joke,” an insider says. Van Miert seemed to agree. Summoning Economy Minister Yannos Papantoniou to his office, the Commissioner gave him a questionnaire to complete within 10 days, demanding to know who would manage the yard, how workers would buy their stake, whether this would be subsidised and why the government was hanging on to its stake. A response came last Friday, saying the government majority stake was for “national defence reasons”, that five international companies had been approached as potential managers and giving guarantees that wages would be kept below inflation and not bumped up to help pay for their shareholdings.