Qatar displayed an indication of trust and support within the faltering Greek economy as Qatar Holdings signed a deal on Saturday to buy a stake in the London-based European Goldfields from the Greek building firm Ellaktor. Qatar Holdings is set to buy a 10 percent stake from the 25 percent stake which Ellaktor currently holds in Goldfields. Furthermore, Qatar Holdings will invest another 600 million dollars in European Goldfields (Reuters).
The CEO of Qatar Holdings, Ahmed al-Sayed told reporters “In total, we will invest in the company about one billion dollars.” Qatar Holdings was formed in 2006 and is an investment house which invests in private and public equity globally. The investment from Qatar is a positive sign for the Greek economy and indicates a display of support and solidarity between the two nations. CEO El-Sayed also said Qatar was “examining different opportunities in the country.”
During July, Greece granted a permit to European Goldfields to initiate mining for gold in the north of the country. This move is expected to turn European Goldfields into the European Union’s largest primary producer of gold. This deal comes a year after Qatar and Greece signed a memorandum of understanding to attract five million dollars of Qatar investment within Greece. “We have built a very strong bond of mutual respect, and we Greeks are especially pleased that this bond leads to investments in our country,” stated Greek Prime Minister George Papandreou after a meeting with Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani.
With expectations for the Greek economy to contract by 5.5% in 2011, Greece is in dire need of foreign investment as the economy has been in a recession for the past three years and is expected to further shrink next year. Greece, which has been trying to implement austerity measures, welcomed this deal as it has reportedly been in talks with Qatari officials to attract foreign investment in order to avoid fears of a default on its debt.
This investment is the second major deal made by Qatar in the past two months. During August, the resource abundant nation provided funding for the merger of two of Greece’s largest banks, Alpha Bank and Eurobank. Paramount, a company controlled by Qatar, will own the stake after taking part in a 1.25 billion euro rights offer and fully taking up a 500 million euro convertible bond issue (Reuters).