Republication of an article by Argyris Demertzis in Eleytherotypia: Desiring to sell EYDAP cheaply the Government of Greece is trying to write off more than € 700 m of debts to the company. The Board of the Company (mostly controlled by the Government) will bring the issue in a Shareholders’ Meeting (to be held sometime in October). This way the Company’s value will be lowered by the above sum, the value of its shares will diminish, and its prospective buyers will be able to acquire it for peanuts.
The Government of Greece in an attempt to diminish the market value of EYDAP, is ready to write off more than € 700 m of its, thus making it easier for the prospective buyers to acquire. At the same time part of the sums owed by several municipalities to EYDAP will be paid by the State; this way the citizens will have paid twice, as the sums that are to be covered through taxes have already been paid (to the municipalities) by those who received said water and sewerage services.
The CEO of EYDAP (Antonis Vartholomaios, who is apparently not concerned about his civil and penal liabilities) has already attempted to force the BoD cut down the sums owed by the Greek State to the Company but failed. Due to the resistance of several Board Members the issue will be referred to a Shareholders extraordinary Meeting. The Board Members that opposed said proposal were Bank and Union representatives as well as the TAIPED (Hellenic Republic Asset Development Fund – HRADF) one. The CEO has been forced to convene another meeting to which he is probably going to submit a similar proposal. Meanwhile the Government put forth an act to be discussed and voted by the Parliament whereby all its debts to EYDAP from 1999 on will be written off.
Memoranda Obligations of the Greek State
According to L 4179/2013 the Greek State will have to pay all it owes to EYDAP and EYATh before the companies are transferred to private prospectors. Such debts to EYDAP (services as well as the State’s share in investments and maintenance of the company’s network) amount to ca € 1,05 billion. Of this € 350 m have already been approved by Shareholders’ Meetings and legally entered in the company’s ledgers as claims, while the State has never offered (nor could it of course) any objection for the rest.
However the Government is trying to pay only € 350 m and write off the rest. In this they are assisted by the company’s CEO, who, after having failed to force the Board to decide on this, is referring the issue to the shareholders. Currently the majority (61,33% of the shares) is owned by the Greek State through HRADF. This simply means that the debtor of a company will decide as to how much and when of its debt shall be paid, while HRADF, which has the duty to sell the company’s shares in the highest possible price, will agree to lower its value by at least € 700 m. Still HRADF’s representative in the company’s Board expressed some concerns and hasn’t yet agreed to this.
At the same time (through art 52 of L 4186/2013, which deals with Education issues!) municipality debts to EYDAP are fixed to € 160 m, while interest and penalties over € 200 m have been written off. Such amounts however have already been collected from citizen consumers by the municipalities (and spent for altogether different matters) but will now be paid by the State, that is through taxes raised from these same citizens.
Note from SAVEGREEKWATER: To better understand how exactly the Greek government deals with the debts of the public sector towards EYDAP please refer to these two legislative moves before the calling of the general assembly of stakeholders of the company.
• The government proceeded in offsetting debts between EYDAP and the public sector through an amendment tabled by the ministers of Finance, Infrastructure and Tourism in the bill to reorganize the Tourism Organism EOT (31/07/2013). They also provided the power to determin any eventual debts until 30 June 2013 by Joint Ministerial Decision. This decision refers to debts by the State to EYDAP for infrastructure, construction of water projects of public entities, construction and maintenance of flood protection works, etc., and non-tax debts of the company towards the government.
• A joint ministerial decision (26/9/2013) the Ministers of Interior and Finance was issued to regulate the debts of first and second degree of municipalities to water companies EYDAP and EYATH. (FEK 2410B prot.n. 38560). This regulation refers to debts till the end of July 2013, totaling 162.3 million euros (about 150 million to EYDAP and about 13 million to EYATH) and it will be free from fines. The sum will be paid by the central government and will be deducted from each local government that created it, from their future revenues of state grants of the years 2015-2020.