Business

Greek stocks fall after Depa sale fails to attract bids

In exchange for two EU-IMF bailouts, Greece has agreed to raise 9.5bn euros in asset sales by 2016.
Image caption In exchange for two EU-IMF bailouts, Greece has agreed to raise 9.5bn euros in asset sales by 2016.

Greek stocks have plunged almost 5% after the government said it had not received any bids for natural gas firm Depa, marking a setback to its privatisation programme.

Russia's Gazprom had been expected to bid for Depa.

Depa's sale is key to Greece meeting a privatisation target set as a condition of its bailout by the EU and the IMF.

The news came as EU and IMF officials arrived in Greece to assess progress on its deficit reduction.

Depa had been expected to sell for around 900m euros.

Gazprom spokesman Sergei Kupriyanov said it had not submitted a bid, due to concerns over Depa's financial viability. He said the firm was already experiencing difficulties with users' unpaid bills.

"We did not receive adequate guarantees that Depa's financial situation will not deteriorate until the deal is concluded," Mr Kupriyanov said in a statement.

The Hellenic Republic Asset Development Fund, the privatisation agency, didn't receive any bids for Depa—and only a single offer for its sister company, gas grid operator Desfa, government officials said.

"The DEPA sale surprisingly failed and that's very bad for investor sentiment at a point when Athens looked like it was meeting its targets," said Takis Zamanis, an Athens-based trader at Beta Securities.

Slow progress

Greece started the sales process last year and the deadline for bids was Monday.

In exchange for two EU-IMF bailouts, Greece has agreed to raise 9.5bn euros in asset sales by 2016.

The target was originally set at 50bn euros in 2010, but has been repeatedly reduced due to Greece's slow progress on privatisation.

If Greece fails to meet its privatisation target it would struggle to meet its debt targets, meaning it could be forced into further austerity measures.

The Athens Stock Exchange General Index closed down 4.69% at 939.78.