Greek gambling privatization of OPAP threatens to unravel

Thu Jun 27, 2013 2:52pm EDT

* Privatization of gambling company OPAP has stalled

* Opposing business groups haggle over sale terms

* Failure to complete deal would derail asset sale plan

ATHENS, June 27 (Reuters) - Conflicting interests between opposing business groups threaten to unravel the sale of Greek gambling company OPAP, the head of the country's privatization agency said on Thursday, risking delivery of a fatal blow to the country's asset sale program under its international bailout.

Athens agreed last month to sell a 33 percent stake in OPAP to Greek-Czech Fund Emma Delta for 652 million euros. The sale was hailed as a key move to kickstart the country's ailing privatizations program and reform drive.

But the sale has yet to be completed because Emma Delta has asked for changes to a previous, but also non-completed OPAP deal - the 190-million-euro sale of a 12-year state lottery license to an OPAP-led consortium in which gaming systems providers Intralot and Scientific Games also take part.

"If the lottery deal ... is not signed, the privatization of OPAP will effectively blow up," Stelios Stavridis, chairman of Greek privatization agency HRADF, told Real FM radio.

Emma Delta wants OPAP to pay lower fees to Intralot and Scientific Games for the services they will provide to operate the lotteries. Emma Delta also objects to the two companies' right to veto board decisions on how the lotteries should be run.

Failure to implement the OPAP deal would completely derail Greece's already much-delayed privatization program. HRADF failed to find a single buyer for natural gas company DEPA earlier this month, blowing a 1-billion euro hole in the country's finances.

Asset sales are an integral part of Greece's 240 billion euro bailout program. Finance Minister Yannis Stournaras suggested this week that the country might use spare cash from its bailout-funded bank recapitalization plan to plug any privatization shortfalls.

But privatization revenue shortfalls might still have to be offset by additional budget cuts - a move that Greece's beleaguered coalition government that has a tiny parliamentary majority is keen to avoid.

Privatization failure would also allow the country's lenders, the European Union and the International Monetary Fund, to ask for HRADF's top management to be replaced.

HRADF and Emma Delta had an emergency meeting to resolve the impasse on Wednesday and vowed to find a solution to avoid a collapse.

The state lottery deal should be signed by July 4 and the OPAP sale shortly afterward, Stavridis said. Sources on both sides of the deal told Reuters Emma Delta remained determined to find a solution.

"Emma Delta is committed to Greece and is committed to closing the OPAP sale," said one of the officials who declined to be named.

Asked when he thought the OPAP sale would be wrapped up, he said: "We hope by the end of August, beginning of September."