After many years seeking private investors to purchase struggling Olympic Airlines, the Greek government has struck a deal with the Marfin Investment Group. The Greek government bought the airline from Aristotle Onassis 30 years ago but now will let it go for € 177.2 million. Earlier bids from American charter operator Chrysler Aviation (€ 210 million) and Greece’s Aegean (€ 110 million) were rejected. The American bid lacked financial backing while competition concerns put Aegean out of the running.
Olympic Airlines was established in 1957 by Greek millionaire Aristotle Onassis. Providing service to 35 domestic destinations and 39 others world-wide, the company employed nearly 8,500 as late as 2007. The airline has faced mounting financial problem since the mid 1980s, due in large part from operational mismanagement. The sale is expected to save Greece nearly € 150 million in annual operating losses.
Marfin Investment Group (www.marfininvestmentgroup.com)
Marfin was founded in 1998 under the name Marfin E.P.E.Y., with the original investment strategy of focusing on the Greek banking sector. These investments matured and realized the formation of Marfin Popular Bank in 2006. The company divested itself of its banking assets in May 2007 and separated from Marfin Popular Bank.
Marfin’s current investment strategy is based on the principle of investing in already sound businesses with a goal of consolidating fragmented industries. Their six main sectors of investment are financial, food & beverage, healthcare, hospitality & leisure, information technology, and shipping & logistics.
Institutional investors from Dubai account for approximately 38% of Marfin shares, domestic institutional investors about 15.5%, and the remaining shares are owned by foreign institutional investors and others.
Marfin completed a € 5 billion capital increase in 2007, and along with the sale of Marfin Popular Bank realized a tremendous return for its investors.