=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2005/11/15/financial/= f115929S60.DTL --------------------------------------------------------------------- Tuesday, November 15, 2005 (AP) Greece Scraps Airline Privatization Bid By DEREK GATOPOULOS, Associated Press Writer (11-15) 11:59 PST ATHENS, Greece (AP) -- The Greek government canceled its latest bid to privatize Olympic Airlin= es on Tuesday after the European Union ruled that the troubled airline benefited from illegal subsidy payments. The government would restructure the airline — cutting back servic= es — before launching another privatization effort, Transport Minister Michalis Liapis said. "Despite our serious efforts it is no longer possible to proceed with th= is privatization effort ... We are moving toward an alternative solution immediately," Liapis said. "Draft legislation will be presented to parliament in a few days for the state to create a new airline ... private investors will control the majority (of shares) and be responsible for its management." On Sept. 14, the European Commission ruled that Olympic unfairly benefit= ed from around 700 million euros ($815 million) in illegal subsidies from the Greek government. Before the EU decision, preferred buyers had been named as a consortium made up of Greek investment company Olympic Investors and its U.S. partner, York Capital Corp. It was unclear whether those companies would be involved in the restructured company. Olympic is expected to be relaunched, bearing the same logo and a similar name, next April. Greece will retain the investment bank Lazard as its adviser in the relaunch of the company, Liapis said. Government officials have promised that staff reductions at Olympic would be achieved through early retirement programs and transfers to other public sector jobs. State-run NET television reported that the 6,000-strong work force at Olympic and affiliated state companies would likely be halved, and that the airline's fleet of 40 aircraft would be cut to 25-30. Olympic currently flies to 75 destinations in Greece and abroad and carried about 5 million passengers in 2004. -------------------------------= --------------------------------------- Copyright 2005 AP