Coca-Cola Hellenic is breaking out to London and Switzerland

Coca-Cola Hellenic is breaking out to London and Switzerland

Coca-Cola Hellenic (CCH), Greece’s biggest listed company and the second largest bottler of Coca-Cola's products, said yesterday (11 October) that it is ready to swap its home bourse in Athens for the London Stock Exchange to “better reflect the international nature” of its business.

Commentators - including the FT, which labelled Greece a “crisis-wracked country” - said a more likely reason is Greece's economic turmoil that led to CCH's credit rating downgrade in June.

"A person close to CCH said shareholders had for the past three years been asking the company to delist the shares from the Athens Stock Exchange and move its primary listing to a big stock market," the FT wrote.

The Guardian highlighted the background to CCH's decision, which includes the Athens Stock Exchange falling to a 20-year low and the loss in value of the nation's banks that led to CCH becoming the top business in Greece.

"The Greek bourse is losing a very good company and the London Stock Exchange (LSE) is gaining a very important group,” the newspaper quoted an analyst as saying. "It's very bad news for the Greek economy and bourse."

And if Greece's problems weren't bad enough, the Daily Telegraph said the move “called into question” the effectiveness of the Athens exchange.

“Nearly GBP3.4bn (US$5.46bn) was traded on the LSE yesterday, compared to around EUR62m (US$80.4m) a day on the Athens Stock Exchange, which has seen trading volumes fall by around 90% since 2007,” the paper wrote.

There was a similar tone at the Wall Street Journal, which wrote that investors “won't be sorry to see the back of EEEK, the unfortunate symbol under which Coca-Cola Hellenic trades in Athens”.

“The move will inevitably be seen as a vote of no confidence in Greece,” it added.

Business commentator Damien Reece went even further in his Telegraph column. He wrote: “The move is confirmation that Greece’s capital markets are no longer functioning for private enterprise. The country’s financial and governance systems are no longer fit for purpose.”

The listings move wasn't the only change for CCH yesterday. It is also moving its headquarters to Switzerland, a decision that the LA Times likened to Apple bailing on the US and moving abroad.

What CCH is after in Switzerland, everyone agreed, is a more stable economic and political environment, plus, of course, lower corporation taxes, which in Greece can reach about 45%.

The Guardian said CCH is not the first to ditch Greece in search of lower overheads and won't be the last.

“CCH is the second big firm to leave Greece for a low-tax jurisdiction this week after the withdrawal of dairy company FAGE to Luxembourg,” it wrote. “Analysts said many other big Greek businesses have been weighing up plans to leave the country.”

Yesterday, Greece announced that unemployment has reached 25.1%, with youth unemployment at 50%. Tax revenues, meanwhile, were short of the country's EU bailout target by EUR1.3bn. CCH's decision, as one of Greece's biggest tax payers, heaps further misery on the nation and will make future growth even harder to achieve.

The unfortunate Greece finds itself at the top of a spiral of decline. As Damien Reece put it: “The lifeblood of recovery is being drained long before that recovery can begin.”