Abu Dhabi Firm Gains Control of Greek Shipyard

Greece has finalized a deal to transfer a majority stake in the country's main shipyard from German to Arab control, the Greek defense ministry said Sept. 16.

"The Greek government, ThyssenKrupp Marine Systems and Abu Dhabi Mar today jointly announce that they have reached an agreement by finalizing the contract text," the ministry said in a statement.

"A new page opens for the Greek Navy, Skaramanga Shipyards and the entire Greek shipbuilding and ship repair sector," it said.

ThyssenKrupp will yield 75 percent of its stake in Skaramanga, also known as Hellenic Shipyards, to Abu Dhabi Mar. The deal had been delayed by wrangling over the delivery of a German-built submarine to the Greek navy.

Athens in 2006 had refused to accept delivery of the Papanikolis submarine ordered in 2000 and built by ThyssenKrupp after Greek navy inspectors declared it defective during test runs off the port of Kiel.

Greek Defence Minister Evangelos Venizelos in March said that improvements had since been carried out, enabling the government to authorize its approval.

"Papanikolis is a particularly important property item of the Greek Navy," he said. "It will be used in the most advantageous way for the Greek navy and the state budget."

The government had earlier indicated plans to sell the submarine.

Venizelos added on Sept. 15 that the Navy would also replace a planned overhaul of two older 209-class submarines with an order for two new 214-class submarines. The project will cost 175 million euros ($227 million), he said.

The Greek government, struggling with a debt crisis and facing a huge effort to restructure the economy, has admitted it can ill-afford arms purchases.

But Venizelos stressed that the deadlock over the stalled submarine order "had placed in danger the country's largest shipbuilding industry, thousands of jobs, the entire Greek Navy submarine program and over 2 billion euros already paid by the Greek state without tangible result."

The shipyard agreement will be presented to the Greek parliament for approval and should be in force by Sept. 30, Venizelos said.