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Successful Greek enterprises funded by foreign countries

12 April 2012 / 21:04:49  GRReporter
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The lack of market liquidity has made major Greek companies listed on the Athens Stock Exchange to seek funding from abroad. An example of this is the National Bank of Greece, which has opened financial corridors abroad and has secured funding of over five billion euro. The subsidiaries of the financial institution are of great assistance to the mother company in this approach. Larger Greek banks can rely on their branches outside the country as they serve as a good warranty for borrowing from the British, French, German, Canadian, US and even the Dutch market. This applies also to the Greek representation of Coca-Cola, which has significantly spread in the Russian market. The stability of the company may be influenced by the Greek economic crisis, but investors are still considering it a reliable company and it can easily obtain financing at about 4% interest rate from almost all developed stock markets.

Similar is the situation with Motor Oil, which has open funding lines with the City, but has also good relations with the New York Stock Exchange and the financial markets in Arab countries. The positions of the industrial consortium Titan in foreign markets are very good too and according to the information in the Greek press, it has a loan ceiling of one billion euro from foreign financial institutions. The last corporate bond loan was granted with enviable ease at an interest rate of 4.5%, whereas Greek banks could borrow at 5% interest rate in the best case scenario. OPAP, which holds the monopoly on gambling in Greece, is still profitable, but the major obstacle in raising funds from financial markets remains the significant state share in its ownership. However, the greatest advantage of the company remains its high liquidity, which it maintains due to the specifics of its business and its contacts with foreign investors. The Public Power Corporation DEI relies on the same approach as well. In its case, however, investors are more careful, waiting for the development of privatization.

Smaller companies on the stock exchange are also seeking to get to foreign markets. They are directed mainly to German, French and UK banks to support their financial needs. Companies from the sectors of packaging, office furniture, metal structures and food have the greatest success in those operations. An important role in the relations between Greek companies and German investors has been played by the chambers of commerce in the country by initiating a series of meetings in order to raise the necessary funds for local enterprises. The funding provided by foreign investors allows Greek enterprises to take a breath. Especially given that in almost 90% of the cases, Greek banks are not able to grant a corporate loan to the needy and, when they can, its interest rate is in the range of 10% -12%. The process of recapitalization of Greek banks is expected to increase their liquidity, but it does not mean that interest rates on lending will decrease. This is another reason why successful Greek firms are seeking foreign investors.

 

Tags: EconomyMarketsCompaniesAthens Stock ExchangeForeign funding
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