Larco sale deal is called off
The planned sale of indebted and idle state mining firm Larco has been called off, the Ministry of Finance announced Monday.
Market analysts had long expected the move. It was made inevitable Friday, when GEK Terna and AD Holdings, the consortium chosen to buy Larco’s assets and the accompanying mining rights, informed the ministries concerned of its decision to pull out of the deal.
The consortium noted in its letter that unfavorable developments in the global energy and metal markets, especially in nickel products, and the continuing legal entanglements concerning the shuttered company’s continued employment of its workforce, and the bidding process itself by the failed bidders, led them to withdraw from the deal.
GEK Terna and AD holdings had set up a company, Hellenic Nickel, to transfer Larco’s assets.
The Hellenic Republic Asset Development Fund (TAIPED), the entity entrusted with selling off state assets, was informed of the letter in order to cancel the bidding process for the leasing of the Larymna smelting plant in the Central Greece region.
“The government, in cooperation with TAIPED, will promptly proceed with a review and, if deemed necessary, the restructuring of the deal, in order to launch a new competitive bid. The aim is to find a viable solution,” the Finance Ministry said yesterday.
The once-thriving mining company, which mined iron ore and nickel, has cost the Greek taxpayer several hundred million euros over the past few years. It has been in special receivership since February 2020, because of its inability to pay back debts to its creditors, suppliers and social security agency. Debt totaled €470 million, of which €351.2 million was to power supplier PPC. The state was also saddled with a 2014 EU decision to return €135 million in illegal state subsidies.
The European Court decided, in January 2022, to impose a €5.5 million on Greece for failure to comply, plus €4,368,000 to be paid every six months until state subsidies are fully reimbursed.
