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Italian Ferrovie buys Greek TrainOSE, a day after €692mn debt is written off

Ferrovie Dello Stato Italiane S.p.A. on Thursday signed an agreement to buy 100 percent of Greece’s railways TrainOSE for 45 million euros. The signature ended a four-year tender process and opening a new page in the Greek railways’ future. The signatures fell a day after TrainOSE’s  692-million-euro debt to state-owned to OSE was written off.

Ferrovie Dello Stato Italiane S.p.A. is the third largest railway company in Europe and has agreed to enhance and grow TrainOSE using its know-how and expertise to create a significant railway services company. According to Greek state media, Ferrovie will invest 500 million euros.

The signing of the agreement took place in Corfu in the framework of the 1st Greek-Italian Cooperation Council, by the head of Hellenic Republic Asset Development Fund (HRADF) Lila Tsitsogiannopoulou and the CEO of Ferrovie dello Stato Italiane Group, Renato Mazzoncini.

The privatization of TrainOSE was accompanied by a government decision to write off  a debt worth of 692 million euros to OSE. The exact amount is €692,161,809.27

The Hellenic Railways Organisation (OSE) is the Greek national railway company which owns, maintains and operates all railway infrastructure in Greece with the exception of Athens’ rapid transit lines.

The TrainOSE is the railway company in Greece which currently operates all passenger and freight trains on OSE lines. The company was formerly a subsidiary of the OSE and has been from 2008 an independent state-owned company. 

According to the debt write off decision published in the Government Gazette a day before the signature, “the debts of TRAINOSE to OSE, which are under common control of the Greek State, are written off in the amount of six hundred and ninety two million one hundred sixty one thousand eight hundred nine euros and twenty seven cents (€ 692,161,809.27).

The decision was signed by Finance Minister Euclid Tsakalotos and Transportation Minister Christos Spirtzis.

The debt disappears for the debtor but it remains in the books of the OSE. As the OSE remains in the hands of the Greek state most probably the 690 million euro will burden every Greek taxpayer.

Taking into consideration, Greeks owe more than 300 billion euros, another half billion does not make a huge difference. Does it?

On the other hand, with such a debt, the Ferrovie Dello Stato Italiane S.p.A would have never through a single cent into TrainOSE.

And now it has bought it for a bag of peanuts. All Clear on the Greek Privatization Front.

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