The statement by the managing director of powerful Greek media group Lambrakis Press Group (DOL) was stunning. Panagiotis Psycharis cold-blooded admitted that he got a bank loan of 15 million euro with only guarantee … his signature.
Panagiotis Psycharis was answering questions to the Parliamentary Committee investigating the loans to media groups. The chairman of the committee Sokratis Famellos was qustioning Psycharis about the loans to DOL and the private MEGA TV of which Psycharis’ father Stavros is one of the major shareholders. Stavros Psycharis was an employee at the DOL media Group and took over the company when founder Christos Lambrakis passed away in 2009.
At one point Famellos summed up the loans of DOL to “hundreds of millions of euro”, described the loans repayment progress and concluded that “DOL owes the loan owner Psycharis took in order to buy the company.
“He took a loan of €58 million, transferred it to his company, merged his company with DOL and DOL owes the loan taken to buy it,” Famellos noted.
Psycharis had earlier claimed that his father bought the company from his savings coming from his salary as DOL employee, however with a position of director.
The following except from the Q&A is interesting, logical and stunning but also characteristic how big names of the Greek scenery got loans.
Famellos: “Are the profits from the work of an employed journalist that high that allow him the ownership of a media group? How comes that your father and your family own the media group without an additional business activity other than of an employed journalist?”
“Where did you find the 15million euro?
Psycharis “I signed a guarantee …”
Famellos: “You signed a personal guarantee for the bank loan of 15 million euro. With what guarantees? …”
Psycharis: “Guarantee does not mean cash. I was asked to bring guarantees for the 15million [loan] and I was forced to sign with …air.”
Famellos: “You said with air? Personal guarantee of 15 million euro with air “? With what collateral?”
Psycharis: “With my signature …”
Famellos: “Your signature is worth 15 million euro? Do you want to give me your signature too?”
Psycharis: “Time will tell…”
Famellos: “This is the story of the loans …”sources: newsit.gr, koutiPandoras.gr
The Lambrakis Press Group has played and is still playing a dominant role in Greek publishing and Greek politics, especially through its flagship newspapers, To Vima and Ta Nea. The group also owns the news portal In.gr, the radio station Vima Fm 99.5 and the magazines MarieClaire, Cosmopolitan and Vita.
Members of the Psycharis family hold the most important positions in the board of directors.
CEO Stavros Psycharis, 71, is facing misdemeanor charges of submitting inaccurate source of income (“pothen esches”) declarations in the years 2010-2014.
I am not familiar with this group and its dealings but based on the above description, what happened here was a classic buy-out loan. In a buy-out loan, a NewCo (a new company which typically has zero assets) borrows money to buy a target company and subsequently merges the NewCo with the target. In other words, the NewCo takes up a loan against the value of the target and buys the target with that loan and subsequently makes the target the borrower. The following makes the above loan a bit different:
It seems that Psycharis put himself on the hook with a personal guarantee. That is very unusual in normal situations because buyers normally shy away from assuming personal risk and/or putting up to much equity for the purchase.
It all depends on the creditworthiness of the DOL Group (which I don’t know). If it is good enough to justify “several hundred millions of EUR” in loans, then this would be a straightforward transaction. If not, one would have to ask why the banks made those loans. Just like in any other similar case.
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This, in Greece, yet Again beggars belief
. should the bank manager who signed off this loan with no collateral whatsoever not be drawn and quartered??. No doubt, in good Greek fashion, he received a handsome fagelos! Disgraceful!
Unfortunately, Greeks are mere children when it comes to leverage buyouts. The film Barbarians at the Gates shows you how real pros do it using zero assets of their own to buy and then liquidate companies making a nice bundle for themselves and hanging everyone else (i.e. employees, pension owners, etc.) out to dry. And parenthetically there are any number of bankers who are more than happy to put their signature at the bottom of such deals. Who’s going to do anything about it? Nowadays this kind of raiding tactics is called a “classic” kind of financial manipulation and is celebrated as a great advancement for mankind and the economy.
Of course poor, simpleminded Panagiotis had no idea that the bank was laughing at his arrogant desperation.
With only his signature as collateral means … all that was once yours Panagiotis, is now all ours.
so the transaction is hard to follow, but, it seems to me the Greek banks were negligent in their handling of loans and more importantly Greek depositors money. Greece is now in the sad predicament it is in,and the current Govt. has no real clue on managing the situation. Situation will be messy in Greece, but, I think Grexit will happen sometime in 2017/2018, the Greek numbers do not add up.Other threat of illegal immigration can only be dealt with outside of the EU, as the UK has begun to do.Greece would be better served taking advice from the UK than the moronic EU.