The developments with the mega casino project in Ellinikon are now stormy, according to a report by Data Journalists.
High-ranking ministers and top Government Officials, whose office is in the Maximos Palace, called an emergency meeting with the bankers. The meeting, which took place in a tense atmosphere, had as its subject the financing terms of the mega project, which is at risk of blowing up.
The financing terms of the project are worse than those initially agreed by the Banks with the investors – GEK TERNA and Hard Rock. According to sources, the Banks have asked Hard Rock and GEK TERNA investors to put in an additional 120 million euros from the 250 million euros they had initially agreed upon.
According to sources, the investors have declared that they will withdraw from the project if no solution is found. The Government does not want a withdrawal that GEK TERNA and Hard Rock have placed on the table.
The Greek State expects revenues of more than 6 billion euros from this investment over 30 years. In particular, the fiscal benefit is estimated to exceed 200 million euros per year for the next 30 years.
The €3 billion is estimated to come from Casino gross revenue taxation, €1.1 billion from social security contributions, €800 million from income tax, €500 million from VAT and €600 million from fees in Municipality.
Lamda Development also expects high revenues as the concession holder of the area.
Data Journalists have published an extensive report on the problems they have raised with the Banks since July 21. According to sources, the Banks, primarily National and, secondarily, Alpha, are asking for additional collateral and greater involvement of investors, but some in the market do not believe in the project.
On the other hand, Piraeus Bank seems to believe in the project and has assumed the role of mediator to move the project forward so that it does not blow up.
“This is a complex project, the likes of which have not been done in Greece and which require significant capital,” bank executives say, admitting that they have asked investors to contribute more money and that there is no timetable for the final agreement.
On the “table” there is also the alternative, that part of the investment be covered with funds of 350-450 million euros from the Recovery Fund.
The Recovery Fund was mentioned during the regular general assembly of GEK TERNA and its head, Mrs G. Peristeris, who, without referring to the investment in the Casino in Ellinikon, said that “the group will also seek to secure loan funds for selected projects and his investments.”
The GEK TERNA group, apart from the Casino in Ellinikon, has an investment program of 10 billion euros. This year alone, it will invest around 2 billion euros out of 350 million euros in 2022.
The fatal role of Michalis Karloutsou – Discontent from government, banks and investors
Another aspect that has not been illuminated is the role of businessman (?) – “lobbyist” Michael Karloutsos. The son of the Greek Orthodox priest Alex Karloutsou reportedly acted as an intermediary between Hard Rock and the Greek side for the creation of the project.
For many, the role of Mr Karloutsou is fatal for the current situation of the entire project. Sources tell Data Journalists that Mr Karloutsos has displeased both sides as he acted as a “broken” phone between investors and banks.
Michalis Karloutsos is the son of “Father Alex” Karloutsos, well-known in the Greek-American diaspora, who was for many years an active member of the Archdiocese of America, having excellent ties with the Ecumenical Patriarchate and over time with the White House.
However, he is best known for his friendship with the family of the current US president, Joe Biden.
Despite the high acquaintances bequeathed to him by his father, Michael Karloutsos assumed for a few months the Deputy Director of Protocol in the administration of Donald Trump.
He then remained out of the market for some time, up until Hard Rock commissioned him to carry out the “Casino in Ellinikon” project with the results known today, for the K. Mitsotakis government, Michalis Karloutsos, due to his close relations with the SYRIZA government, is considered a “red flag”.
We already tried to contact M. Karloutsos from our previous investigation on the matter, but he did not return our calls or respond to the messages we left him.
The Casino’s investment in Ellinikon has faced obstacles before. Since February 2019, i.e. since the Gaming Supervision and Control Commission announced an International Bidding Competition for the Granting of a Casino Operating License (EKAZ) for a wide range of activities in the Metropolitan Pole of Ellinikon – Agios Kosmas, with an initial deadline for submitting bids to April 22, 2019, there have been several serious issues.
In the end, the tender was held on October 13, 2020, by the decision of the Hellenic Gaming Commission (EEEP); the temporary contractor was “INSPIRE ATHENS” consisting of the companies “MGE Hellinikon BV”, “Mohegan Gaming Advisors, LLC ” and GEK TERNA. The financial offer submitted by the Mohegan – GEK TERNA consortium was 150 million euros. That is, much higher than the minimum expected price determined by the tender documents at 30 million euros.
In the “INSPIRE Athens” joint venture, which was selected by the EEEP in February 2021 as the preferred investor leaving Hard Rock out of the process, Mohegan Gaming and Entertainment (MGE) controlled 65% and GEK TERNA 35 %. The GEK TERNA – Mohegan investment plan for the IRC was valued at 1.1 billion euros (150 million euros for the casino license and 950 million euros for the technical offer to build the complex).
The investment includes, among other things, a 5-star hotel on an area of 120,000 sq.m. with 3,500 beds, a conference and exhibition centre of 24,000 sq.m., a sports-concert arena for 10,000 spectators and a casino area of 15,000 sq.m.
Mohegan CEO Ray Pineault speaking at the Delphi Economic Forum, said the IRC investment would be completed in 2025-2026.
Hard Rock tried by legal means to return the result, while its CEO, Jim Allen, had stated at the time that the process was unfair from the beginning and that their offer was better than that of the Mohegan-GEK TERNA partnership, but the committee never evaluated the financial terms.
Among other things, he appealed to the Council of State for the case of the casino license in Ellinikon after it was excluded from the tender for selecting a contractor for the casino license and creating the Integrated Resort Casino (IRC). The Supreme Court rejected the appeal.
The Plenary Session of the Council of Ministers with its decisions no. 1819 and 1820/2020 considered that the company “SHRE/SHRILLC” (Hard Rock) was rightly excluded from the initial stage of the contest in question by the legislation on the conduct of Public Tenders.
But Mohegan Gaming & Entertainment’s miracle lasted “three days,” throwing in the towel before the ink on the deal was dry. But the white towel Mohegan Gaming & Entertainment finally threw in, stepping down as leader of the consortium to leave the whole project, paving the way for Hard Rock to assume the role of “white knight”.
The American group agreed to replace Mohegan by acquiring 51% of Inspire Athens, while GEK TERNA retained 49%.
The procedures for transferring 51% of the shares of IRC S.A. at Hard Rock International were completed last May. The collaboration between Hard Rock International (51%) and GEK TERNA Group (49%) concerns the 30-year concession for constructing and operating the Integrated Tourist Complex with Casino in Ellinikon.
TERNA SA, a 100% subsidiary of GEK TERNA Group, will perform all construction work.
It is noted that the concession agreement between the Greek State and the Concessionaire consortium Athens IRC (MGGR LLC, MGE HELLINIKON BV and GEK TERNA A.E. Holdings, Real Estate, Constructions) for the license to operate a Casino Business (EKAZ) of a wide range of activities in the Metropolitan Pole of Hellinikon – Agios Kosmas and the construction of the construction projects of a hotel, conference and exhibition centre and public gathering space for sports or cultural events, was signed in June 2022.
Source: datajournalists.co.uk
