Greece to 'sell bonds backed by state property'

Crisis-hit Greece plans to sell bonds with state property as collateral to buy back sovereign debt and postpone a privatisation drive under unfavourable market conditions, a report said on Saturday. To Vima weekly said the Hellenic state asset development fund, an agency set up last year to manage Greece's asset sales, plans to create a privatisation bond to buy back part of the country's enormous debt on the secondary market. For every one billion euros earned by the planned bond, the state will be able to buy back older debt worth 2.5 billion euros given the currently depressed value of Greek debt, unnamed agency officials told the newspaper. Greek state debt, which has exploded to over 350 billion euros ($447 billion), is currently trading up to 35 percent below its face value, To Vima said. Athens last year pledged a sweeping privatisation drive in return for bailout loans from the European Union and the International Monetary Fund. The process originally aimed to raise 5.5 billion euros by the end of the year, and 50 billion overall by 2015. But targets have been revised owing to procedural delays and fears that a hurried sale in the present economic downturn will only bring limited revenue. In December, Greece sold four disused Airbus A340 jets for 40.4 million dollars, a sum which aviation unionists dismissed as scrap value. The privatisation list includes ports, regional airports, utilities and motorways, a leading casino, public-owned defence, train and mining companies, and a key stake in Greece's monopoly gaming operator.