Decision on troubled Larco needed now, TAIPED warns

TAIPED, the State Privatization Fund, has sounded the alarm over an approaching European Commission deadline for a government decision on Larco, the troubled state-controlled general mining and nickel producer.

The European Commission had given the Greek government two weeks to decide on whether to implement an agreement reached in 2014 by the country’s previous Antonis Samaras-led conservative administration and sell the industrial enterprise or table an alternative proposal. This period is set to expire.

TAIPED officials who have kept a close watch on the developments at Larco for years told energypress that, other than the 2014 sale plan, no other proposals exist at present. Any alternative action would need to be examined and endorsed by the European Commission’s Directorate-General (DG) for Competition.

The time required to examine any alternative solution will only put Larco deeper in the red and further weaken the industrial enterprise’s market worth as well as the Greek government’s bargaining power. According to latest estimates provided by sources, the industry is believed to be incurring losses of roughly five million euros per month, while its debt owed to PPC, the main power utility, has reached 200 million euros. Larco’s financial woes have been made worse by the drop in commodity prices.

The 2014 plan involved two choices. One entailed a return – by the Greek government to the European Commission – of 136 million euros, plus interest, of state aid provided to Larco. The Greek government was also offered a second choice to sell Larco through an international tender procedure and avoid paying the aforementioned sum. In this case, the company would also go into liquidation.

This latter plan would entail two separate tenders, staged almost concurrently, one by the Greek state for the company’s production plant in Larymna, in the Fthiotida province, slightly northwest of Athens, and another by Larco for its mines.

On a recent visit to Athens, Gert Koopman, the European Commission’s Deputy Director-General for State Aid, stressed that Greece’s return of the aforementioned sum would not be demanded only if the second plan for Larco, involving the tenders, is carried out.