Greece to declare its largest shipyard bankrupt

The Greek government has moved to have the country’s largest shipyard Hellenic Shipyards declared bankrupt. The insolvency proceedings were filed under the country’s revised bankruptcy code, which foresees the rapid sale of assets and the withdrawal of old shares.

The government’s petition has brought a strong reaction from the yard’s owner, Privinvest Group of Lebanon and yard workers trade unions. One of the largest facilities in the Mediterranean, the Skaramanga-based yard has been virtually closed since 2014 with workers claiming back pay.

The petition was filed in an Athens first instance court in the wake of a decision by the International Arbitration Court of the International Chamber of Commerce (ICC) which ordered Greece to pay between EUR150m ($177m) and EUR200m ($236m) to the Privinvest Group, which took control of Hellenic Shipyards in 2010.

Privinvest’s Lebanese owner Iskandar Safa, has called on Greece to respect the ICC ruling and warned of further legal claims, in Greek and international courts.

Greek Deputy Economy Minister, Stergios Pitsiorlas, said discussion over the bankruptcy petition is scheduled for mid-November, assuming the court accepts the petition. Essentially the government has commenced the process to force Privinvest to abandon Hellenic, enabling it to search for a new strategic investor.

The ICC case saw the Safa family claim the Greek state had failed to meet contractual agreements worth hundreds of millions of Euros following Privinvest’s purchase of Hellenic. Among the claims, Safa had sought arbitration in his capacity as an individual investor in the company, while the same dispute extends to a bilateral investment pact between Lebanon and Greece.

Lawyers for Privinvest say the ICC decision vindicates it and Hellenic. And have told Seatrade Marirtime: “We are continuing our counterclaims against the Hellenic Republic in a later ICC procedure around the same issue initiated by the Hellenic Republic whilst our shareholders are pursuing the Hellenic Republic in the International Centre for the Settlement of Investment Disputes pursuant to the relevant Bilateral Investment Treaty.

“This was also stressed in a letter Privinvest Shipbuilding SAL (Holding) president and ceo, Boulos Hankach sent to the all the workforce and copied to the government.”Sadly, the government wants to destroy the path to the future before we can even take the first steps on it. We will take all legal means to stop the government from succeeding, and we strongly hope for your support in our endeavours,” says the letter to the workforce It accuses the government of spreading “a lot of rumours about what the Arbitration Award supposedly says, trying to make the decision appear as a victory”.

“Actually, nothing could be further from the truth. The arbitration tribunal has fully vindicated us.” The letter then relates  what the tribunal decided. Among the decisions are a number of payments to be made to HSY by Greece regarding different contracts the yard held.

Hellenic’s workers union, Triaena, says the most significant thing about the ICC judgment is “the shipyard remains open and intact” and “can continue to operate and indeed without bans on the construction of warships for foreign navies”.

The trade union said it had requested a meeting with competent government ministers to discuss the course of the shipyard after the judgment, but instead of a meeting it was informed the government is seeking the appointment of a special receiver in order to sell the Skaramanga yard’s assets through an auction.

The union says failure to find a buyer, “who will take into consideration workers demands”, will see Greece paying out hundreds of millions of Euros in compensation to the company and its owners in compliance with the judgment of the Arbitrational Tribune. “At the same time, employees will lose our jobs, will lose earnings owed since April 2012, and we will lose our future. With the government’s choice, this course is predetermined,” contends the union.