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Greece offers Corfu land as it looks to raise cash

March 6, 2012
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ATHENS, Greece—Greece's privatization fund on Tuesday launched a tender for the exploitation of a large seaside plot on the western resort island of Corfu, part of a massive effort to raise funds through sale of state assets.

The Hellenic Republic Asset Development Fund said it is seeking to sell the "right of surface" for the 120-acre, forested property at Kassiopi for up to 100 years.

The tender is part of Greece's bid to raise euro50 billion ($66 billion) through an open-ended program of privatizations and concession sales, half of which will involve real estate. The country has committed to raise euro19 billion ($25 billion) of that sum by 2015.

A statement from the fund invited investors to submit expressions of interest by April 10 in the Corfu property, which is in the northeastern part of the island. About a third of the land can be developed, and one idea is that it could be used to build an upmarket residential complex to be used as vacation homes and hospitality or leisure facilities.

The fund has already launched tenders this year for the sale of the DEPA gas company and commercial real estate in Athens.

Greece has committed to the privatization program in exchange for the international rescue loans that have been keeping it afloat since May 2010. The initial deadline for the entire program was 2015, but that was later relaxed to allow its better implementation.

Greek officials say they expect the program to create some 50,000 jobs by 2015, and boost investment and growth.

The country is in its fifth year of recession, which has pushed unemployment up to a record 21 percent in November with more than a million people out of work.

Locked out of the international bond market by exceptionally high interest rates for the past two years, Greece has maintained a presence by regular auctions of treasury bills. The country raised euro1.14 billion in the auction of 26-week treasury bills Monday, with its interest rate dipping marginally compared to a similar sale last month, the Public Debt Management Agency said.

The bills had a 4.80 percent yield, compared with 4.86 percent in the Feb. 7 auction. The sale was 2.63 times oversubscribed, slightly less than the 2.72 times oversubscription rate in last month's sale.

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