Rescue of vehicle and ship firms enters crucial stage

The government is trying hard to revive two companies which are important for the local economy and the country’s armed forces, Hellenic Vehicle Industry and Elefsis Shipyards.

The new political leadership at the Development and Investments Ministry, headed by New Democracy bigwig Adonis Georgiadis, are confident about salvaging Hellenic Vehicle Industry, which builds buses, trucks and military vehicles, but are at present less certain about Elefsis Shipyards, which also has military ties.

In the case of the shipyards, located in the town of Elefsina, west of Athens, the government is holding talks with the owner, ONEX Shipyards, which also owns the more successful Neorion Shipyards on the Aegean island of Syros. Although officials say that negotiations with ONEX owner Panos Xenokostas are at an “advanced stage,” they are also preparing for the possibility of an impasse and thus developing alternative plans.

As for Hellenic Vehicle Industry, the ministry is preparing a new round of bidding to sell the company, the third such attempt in the past two years. The ministry’s optimism that this third time will be the charm is based on the fact that firms active in the vehicle building sector have expressed an interest. They are believed to include Germany’s Krauss-Maffei Wegmann and South Africa’s Paramount, which had taken part in the first two unsuccessful bids, as well as two Israeli firms, Elbit Systems and Plasan.

Both previous bids, in 2017, had been canceled, the first because the bids fell afoul of the bidding terms and the second because none of the bids was considered satisfactory. The third bid was announced in February, before being postponed once and then put on hold by the previous government ahead of July’s general election.

Regarding Elefsis Shipyards, the threat of receivership is hanging over the company, which has until the end of September to submit a debt restructuring plan, before the creditors move in to seize assets.

Talks with ONEX to salvage the shipyard will also hinge on the performance of the company’s other shipyard, which will impact ONEX’s ability to pay back old debts accumulated by Elefsis, says a Development Ministry official.