Marfin Investment Group, the investment firm backed by Dubai Group, has been chosen by Greece to buy its unprofitable flag carrier Olympic Airlines (OA).
Talks between Marfin and the Greek Government's advisors on a sale of the flight business and maintenance base "ended successfully," Development Minister Kostis Hatzidakis said in a statement. The negotiations have been extended for a week so talks between Marfin, Swissport and the advisors on a sale of the ground-handling division can also be completed, Hatzidakis said.
If the deal is successfully completed, the state will receive €177 million ($224.4 million) from the sale, according to Hatzidakis. The sale, which is subject to European Union approval, will avert the closure of an airline that links the mainland and hundreds of Greek islands, playing a critical role in the country's tourism and transport infrastructure.
Olympic Airlines is heading back into private control under the deal after several failed attempts.
Three decades after it bought the company from legendary Greek tycoon Aristotle Onassis, the Greek state is selling it for a combined €177.2m, Hatzidakis said. Marfin submitted a €45.7m bid on February 13 to acquire the flight operations of Olympic Airlines, soon after the failure of an earlier attempt by the government to find a buyer.
Greece's largest buyout fund, MIG also bid €16.7m for Olympic's maintenance, repair and overhaul assets.
On the same day, global ground handling firm Swissport offered €44.8m for Olympic's ground handling assets. The offers exactly matched the minimum valuation of Olympic's assets by the Greek government's independent advisors.
The Greek state also expects to recoup another €70m set aside to create Pantheon, a temporary holding company for Olympic.
If successful, Olympic's acquisition will enhance MIG's current collection of some of the biggest household names on the Greek market.
MIG already controls Greece's main dairy and food group Vivartia and dominant ferry operator Attica. It also has stakes in the health, tourism, real estate and information technology sectors.
Listed on the Athens Stock exchange, 58 per cent of MIG's share capital is held by Greek strategic investors. International investors hold another 24 per cent and Dubai Group owns the remaining 18 per cent.
Swissport is owned by Ferrovial.