Global lights dim on Hellinikon investment

Global lights dim on Hellinikon investment

It is the investment everyone has been waiting for in Greece for decades.

It is the game changer for the Greek economy.

And after years of delays, it looks like it is finally going ahead. But the red tape and political haggling came at a cost.

Two of the foreign investors who signed up for the eight billion euro Hellinikon deal have pulled out, leaving Greece's biggest international project without any global players.

With the change of government in July, some serious steps were made in pushing ahead with the seaside development, located at the former international Athens airport vacated in 2001. Talk has emerged that construction at the site could start next year.

The news, however, came too late for China's Fosun and Abu Dhabi's Eagle Hills. The companies were part of an investor consortium led by Greece's Lamda Development that had been awarded the construction of the development in 2014. For reasons which are not clear, they both pulled out of the deal, leaving the Greek company to go it alone on the project.

Lamda, which is backed by the Latsis family, has the financial muscle to do the job on its own. It announced last week a 650 million euro share capital hike that is being backed by all of its major shareholders.

The presence, however, of two foreign investors lent an international dimension to the investment that will be sorely missed. Apart from helping raise funds for the Hellinikon investment, the involvement of Fosun and Eagle Hills were seen as boosting the appeal of the coastline the project sits on, known as the Athens riviera, to a global market, experts say.

But perhaps the biggest drawback is that this is further evidence of Greece's ongoing struggle to draw large global investors despite an improving economy and attractive investments being on offer. More is needed to convince investors that the country is not only moving past its devastating economic crisis but is also serious about doing business.

*This article was originally published on LinkedIn on September 24.

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