Supplier deals under review as OPAP restructures
New board led by Kamil Ziegler initiates broad company changes as state monopoly seeks to renegotiate supplier contracts
Greek state monopoly OPAP is to undergo a wide-reaching company overhaul led by its new board of directors following its privatisation.
New chief executive officer Kamil Ziegler revealed during an analyst call that a group restructuring will take place in the coming months after “room for improvement” had been identified since equity fund Emma Delta completed its privatisation in August.
Internal procedures at OPAP will be changed in order to create a strategic body that will discuss and take decisions collectively, rather than the previous system which saw lower levels of management excluded from the process.
Ziegler also announced his intention to “reduce bureaucracy” in the decision making process, enabling OPAP to make faster decisions and transform it into a “business and results driven company”.
Cost cutting initiatives are also set to be launched, with high distribution costs highlighted as a specific area of concern.
As part of “cost containment” procedures designed to make the operator more profitable, Ziegler confirmed OPAP had sought to renegotiate the Hellenic Lotteries supplier contracts it had signed with both Intralot and Scientific Games.
Ziegler stated that since the privatisation, the board had analysed the contracts, worth 192m of which OPAP had paid 67%, and considered them to not be beneficial to the company moving forward.
“The goal is quite clear. We are convinced there is some room for improvement and to bring some savings to the company,” Ziegler said, adding that the benefits of any renegotiation are unlikely to be felt until H2 2014 as come contracted costs have already been incurred for next year.
Potential cuts to personnel expenditures will also be considered, however Eurobank Equities analyst Stamatis Draziotis believes the group’s personnel costs are comparatively small and could be limited to some highly paid executives being incentivised to leave, rather than a wide ranging redundancy round.
The new board of directors was installed last month, with Ziegler having previously worked for Czech gambling monopoly Sazka. Czech billionaire Jiri Smejc and Georgios Melissanidis, the son of Emma Deltas co-owner Dimitris Melissanidis, also joined Ziegler on the board.
Intralot was unable to be reached for comment on this story.