Transcript Karakostas - Capital Link Forum

Corporate restructuring
in the Greek Market Place
Reasons effecting corporate restructuring
in the financial sector.
Critical mass in terms of :
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Network expansion
Capital base
Assets under management
Size of balance sheet
Operating cost control
Reasons effecting corporate restructuring
in the financial sector (cont).
Quality and sustainability of income structure
• Interest result threatened by interest rate
convergence
• FX Income under threat from the application of Euro
• Need to expand the proportion of income from
services
Reasons effecting corporate restructuring
in the financial sector (cont).
Provision of know – how and
international expertise
Market capitalization, share liquidity, and
wide-investor base
Drivers of corporate restructuring and
consolidation.
Widely spread and international investor
base in order to :
• Defend valuation
• Enjoy capitalization premium vis-à-vis non liquid
rivals
Participation in country indices
Athens Stock Exchange - Key figures.
Composite Index
1997
1998
1999
2000
2001
1.480
2.738
5.535
3.389
3.267
85%
102%
-39%
-3.6%
Annual Return %
Listed Companies
237
258
294
342
345
Market capitalization (bn Euro)
29
67
198
117
118
Market Cap / GDP
30%
64%
160%
98%
Avg. Daily Volume (mn Euro)
67
164
693
428
173
Drivers of corporate restructuring and
consolidation (cont).
Many listed companies that belong in the
same Group with similar activity and
substantial cross-holding structures distort
shareholder value and dis-encourage
investment
Economies of scale and leaner management
structures
Drivers of corporate restructuring and
consolidation (cont).
Small listed companies need to merge to create
larger corporate entities in order to enjoy:
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Increased capabilities and leverage in their business
Financing ability
Operational and activity synergies
Comparability to international standards
Wider shareholder base
Share liquidity
Some Key Statistics of Companies Listed
in the Athens Stock Exchange.
• 1st 10 by capitalization = 43% of total
• 1st 20 by capitalization = 57% of total
• Only 19 companies with capitalization >1bn Euro
• More than 50% with capitalization <100 mn Euro
Construction Sector Example
Drivers of consolidation
• Positive industry fundamentals
• Large financing capabilities required by increased
real estate activity and the expansion of the B.O.T.
concept
• Competition from international groups
• Requirement for increased construction capacity
• Specialization in more areas
• New construction company Law
• Need for large market capitalization and increase
share liquidity
Drivers of corporate restructuring and
consolidation (cont).
Need for corporate clarity and focus