Category: Greece

“While the Greek government has responded well to the COVID-19 crisis, shutting down a lot of social hotspots very early on, there are some areas which remain troubled,“ says Virginia Murray, a Partner at Watson Farley & Williams in Athens. “Tourism is a massive part of the Greek economy and the crisis stands to leave a huge impact, which is a real shame given that Greece has started to turn a corner, economically speaking, particularly since the start of the year.”

The country is currently on lockdown, Murray says, with “numbers of new cases still being manageable.“ According to her, “people can leave the house by notifying the authorities via text message or written document, but mainly for going to get groceries, taking exercise, or going to work.” She reports that some places “have put curfews in place, like Mykonos,“ adding that “it wouldn’t surprise me if a general curfew gets placed around Easter, which is a massive family holiday here.”

“All the hotels are shut down, and while there haven’t been waves of cancellations for the summer season yet, they may not be far off,“ Murray continues. To stem the effects of the crisis, the government has introduced a raft of measures, including support payments for people whose work has been suspended, delaying or discounting tax and social security payments for businesses, and suspending loan repayments, as well as making it illegal to lay people off because of the COVID-19 crisis. Still, she says, “these measures are expensive and come at a great price to the State, especially now, just as Greece was moving away from a period of recession.”

Murray reports that Greek courts have been closed for almost a month, that court bailiffs have stopped working, and that most public registries are closed. “The notaries were initially banned from executing any deeds other than wills and no corporate registrations are possible since the registries are closed,” she says. In her opinion, the Greek government is “doing everything it can to respond to the difficulties caused by the lockdown,“ and she adds that we can “expect to see further legislative changes in order to enable most work involving the State to be performed electronically.“

Finally, Murray reports, the legal industry remains busy. “A lot of companies have term sheets and are rushing to finish loan agreements out of fear that margins may be increased,“ she says. The energy sector is booming as well, she says, noting that there have been no cancellations involving energy projects as yet. In addition, she says, “large law firms in Athens were hiring like crazy before the crisis started, so it is realistic to assume that no massive layoffs will occur within the short term, but there may be a transitional period until firms get accustomed to having their teams working remotely.“

White & Case and Zepos & Yannopoulos have advised Centerbridge Partners, L.P. and Elliott Advisors UK Limited on the acquisition of a EUR 900 million portfolio of secured non-performing small business lending and SME loans secured by Greek real estate from the National Bank of Greece. Karatzas & Partners reportedly advised the NBG on the deal.

According to White & Case, “The NBG completed the disposal of the portfolio to Symbol Investment NPLCO DAC, a company jointly owned by funds managed by Centerbridge Partners and Elliott Advisors. The consideration of the transaction is equivalent to approximately 28 percent of the principal amount of the portfolio and is capital accretive to NBG.”

According to the firm it “advised on all aspects of this highly complex transaction, including the joint-venture and acquisition structuring, the asset servicing arrangements with Cepal Hellas, and the limited recourse senior financing together with specialist advice on European risk retention and securitization regulations.”

The White & Case team was led by Partners Debashis Dey (Dubai & London) and Jeffrey Rubinoff (London), and included Counsel Claudio Medeossi (Dubai & London) and London-based Associate Lisa Seifman and Dubai-based Associates Greg Pospodinis and Adam Gao.

There’s a high level of activity in the Greek energy sector, says Dimitris Assimakis, Partner at Norton Rose Fulbright in Athens. “Renewables are going to be huge in the near future,” he says, “mostly due to the fact that Greek authorities have put forward an ambitious plan to have the share of renewables in the final gross electricity consumption at 60% by 2030.“ According to Assimakis this doubling of the current 29% share will require “a very aggressive investment program – mostly from the private sector.”

Assimakis reports that there is a “serious privatization” in the works. “The Public Gas Company – DEPA – is set to be privatized in a two-fold manner following its ongoing corporate restructuring,” he says. “As a result of this corporate restructuring, DEPA’s wholesale and retail supply activity will remain with the company, while there will be a spin-off of its gas distribution activity, which will be transferred to a new entity.” The tender processes for the privatization of both of DEPA’s business segments are ongoing, with “the deadline for submission of the expression of interest for the supply business set for March 23.” In addition, he says “there has already been great interest shown by PE funds, infrastructure funds, and utility companies during the expression of interest tender phase for the gas distribution spin-off.” Assimakis believes that the process for both is likely to end by early 2021.

But the privatizations do not end there. According to Assimakis, “it has been announced that the government will, sometime this year, engage in the privatization of the electricity distribution network, which is operated by a wholly-owned subsidiary of the state-controlled Public Power Corporation.“ According to him, the government will put 49% of the entity operating the network up for bid, “along with some of the management rights.” He says that the government is also considering selling off a part of its stake in ADMIE – the power transmission operator – which was partially privatized in 2017 when 24% of it was acquired by the State Grid Corporation of China.

“I’d say that another angle to investments in the Greek energy sector is that they will have an impact in the wider region,“ he continues. “The vertical gas corridor between Greece and Bulgaria — the IGB pipeline project — which finally gets under construction this year, will likely be finished in 2021.“ He reports that this will have wide-ranging implications for the entire region, as it can “diversify, in combination with the FSRU project developed offshore the port of Alexandroupolis, the gas supply options for the Balkans as a whole.”

“Gas remains important for Greece due to a phase-out plan for coal,“ Assimakis states, referring to one of the country’s main sources of power, as the government has plans “to shut down all of the operating coal power plants by the end of 2023.“ He believes that what will fill the gap will “most definitely be gas and renewables.“

Ultimately, Assimakis insists that Greece has a bright future. “After a long period of recession, it would seem that things are on a turn, with GDP finally growing and the government set to introduce measures to ease the tax burden on corporate players.“ He also describes initiatives to combat the brain drain Greece has been experiencing as a result of the crisis. “Some 500 thousand people have left the country – which is a huge loss,” he says. “The state, backed by large corporations, has a plan for a ’brain gain’ scheme — that is to say, to introduce incentives for young professionals to come back to Greece and continue their work here, to benefit the economy.”