Greek Olympic Airlines enters a new era

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Olympic Airlines on Monday entered a new era, a long period of decadence finally ends giving its place to an era of high expectations and demands, Development Minister Costis Hatzidakis said during a privatization ceremony of the national carrier and the signing of the final agreement for the purchase of Olympic Airlines’ and Olympic Airways Services’ assets by Marfin Investment Group (MIG).

“Olympic Airlines has been for years the big patient of our economy, creating huge debts of one million euros daily, burdening taxpayers and causing serious legal problems for our country,” Hatzidakis said underlining that Monday was the peak of hard efforts which lasted 18 months. The Greek minister stressed it was very significant that the national carrier was transferred to the hands of a powerful and credible investor such as MIG, amid a difficult international conjuncture. “MIG’s successful course during all these years is creating high expectations and makes us optimistic over the future of Olympic,” he said.

Olympic Airlines cost around 350 million euros to Greek taxpayers annually, Hatzidakis said adding that the state would receive 177.2 million euros from the sale and another 150 million euros annually from tax and social insurance contributions. At the same time, Greece will enjoy a more healthy environment in air transport, without monopolies or unfair practices which will work to the benefit of consumers, he noted.

Andreas Vgenopoulos, vice-chairman of MIG, addressing the ceremony expressed his satisfaction over the signing of the agreement by saying: “We did our duty, it was inconceivable not to have an Olympic”. He committed to create a new airline company, healthy, very strong and developing to the benefit of MIG’s shareholders, its workers, tourism and of the national economy in general. “We promise to do everything to make Greeks proud for a new Olympic,” he said.

The agreement

Marfin Investment Group Holdings S.A announced that the definitive legal agreements (share sale and purchase agreement, shareholders agreement as well as all other necessary legal documentation) have been signed between the Company and the Hellenic Republic for the acquisitions of Pantheon Airways S.A (flying operations), MRO NewCo (technical base) and the Ground Handling NewCo (ground handling services) (collectively the “Acquired Entities”). The above mentioned agreements are subject to ratification by the Greek Parliament, expected to take place in the next few weeks, and will thereafter be vested with the validity of a law of the Greek State.

MIG informs investors about certain aspects of these transactions:

* All Acquired Entities are effectively start-up businesses, which own only selected assets to be sold by the Hellenic Republic and carry no liabilities or obligations whatsoever;
* The Acquired Entities are not in any way the successors, in a legal or any other manner, of the state-owned aviation companies, including but not limited to Olympic Airways, Olympic Airlines, Olympic Aviation etc. This is safeguarded by national legislation that is already in place and has been vetted by the European Commission;
* In a period of unprecedented financial and economic instability, the nature of the transaction ensures that MIG maintains significant strategic flexibility regarding the operations of the Acquired Entities. Indicatively, MIG can select at its own discretion the assets that it wishes to acquire (such as aircraft and technical equipment at a very favourable environment), the way in which such assets will be acquired (purchase, leasing etc.), the number and type of employees that it wishes to recruit, the routes in which the new airline will operate and a broad array of more strategic alternatives. MIG’s full flexibility at this stage will enhance its determination to create a very efficient aviation business with strong competitive advantages.

MIG, in close cooperation with the recently retained aviation management team and external consultants, is currently finalising a detailed strategic and operational business plan for each of the Acquired entities. Post finalisation of this exercise, MIG will be able to provide visibility regarding its plans for, and the prospects of, the Acquired Entities.

Marfin Investment Group is the largest Greek business group in the wider South East European region. It numbers in excess of 50,000 employees and associates and has a presence spanning over 40 countries.

MIG is headquartered in Greece and listed on the Athens Exchange. 58% of its share capital is held directly or indirectly by Greek strategic, institutional and retail investors and 24% is held by international institutional investors. Dubai Group owns a c.18% stake in the Company, is represented on its BoD via 3 non-executive members and has no involvement in the management of the company.

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