(Bloomberg) -- Greece’s state asset development fund plans to proceed with an initial public offering for its 30% stake in Athens International Airport, with the company’s largest shareholder ready to buy 10% of those shares. 

The selling shareholder, Hellenic Republic Asset Development Fund, and the largest shareholders and operators, AviAlliance GmbH and AviAlliance Capital GmbH, both controlled by Canadian insurance fund PSP Investments, have reached an agreement on the way forward for the airport, Dimitrios Politis, Chief Executive Officer of the fund said in an interview in Athens.

“Now we are at the stage where we present to the other shareholders and the government the details of what we have agreed on with our partners,” he said.

Greece’s largest airport, known as Eleftherios Venizelos, handled over 22.7 million passengers in 2022. That was an 84% increase from the previous year, as tourism rebounded from Covid-19-related restrictions. Given the significance of tourism to the Greek economy, Politis described the airport as “a super proxy for the success of the Greek recovery.” A growing economy depends on healthy capital markets and sizable, top-performing companies on the stock exchange, he added. 

The Hellenic Corporation of Assets and Participations SA, which manages a substantial portion of Greek state assets, holds a 25% stake in the airport. AviAlliance and AviAlliance Capital together have a 40% holding, and Greece’s Dimitris Copelouzos family has a 5% stake. 

Under the draft agreement, HRADF will IPO its 30% stake, and AviAlliance will have the right to acquire 10% of that stake at a controlling premium, making the PSP controlled-entities the majority shareholders.

“It’s favorable to the IPO, the vote of confidence by its largest shareholder and operator of the airport,” Politis said. 

The 30% stake on offer is expected to be valued somewhere between €800 million and €1 billion, depending on the market, according to the CEO. Politis wants to move quickly to close the deal. “We’re trying hard to have the option to complete the transaction in the first half of the year.”

Greek Economy

Greece is heading to national elections this spring, but Politis isn’t worried about that interfering with the country’s economic momentum. The government predicts that economic output will increase by 1.8% in 2023 — higher than the expected EU average. 

Revenue from privatization is anticipated to rise to €2 billion this year, up from €595.3 million in 2022. That doesn’t include proceeds from the Athens airport plan.

 

The fund is also moving ahead with other large projects, such completing the process of granting concession rights for the Egnatia Odos Motorway and Attica Motorway. 

In addition, “we have assets of lesser nominal value that have a substantial multiplier effect, especially for the local communities,” Politis said. These include marinas, ports and real estate assets with tourism potential. Rather than just collecting large lump sums through sales, he emphasized the need to develop assets in a way that benefits local communities, citing the example of marinas in which every euro spent results in 7 to 8 euros going back into the community.

HRADF is also helping other state entities implement projects under the EU’s Recovery and Resilience Facility, created to mitigate pandemic’s economic impact. 

“The fund wants to move from the mandate of selling assets to developing them,” Politis said, adding that this also means “using its knowhow for other state entities that have assets.”

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