Deutsche Telekom Hurt by $5.6B Greek Debt

Hellenic Telecommunications Organization SA has dropped 84 percent since Deutsche Telekom AG began buying shares in the Greek operator in 2008.

The German owner will now accelerate a turnaround of the company to recoup some of the 4 billion euros ($5.5 billion) in investments. Claudia Nemat, the McKinsey & Co. consultant who took over this month as Deutsche Telekom’s head of Europe, spent part of her first week in Athens, where she said in an interview she is “keen to develop the asset” because OTE, as the unit is known, is among the Bonn-based company’s most important operations. The optimism contrasts with Chief Financial Officer Timotheus Hoettges’s comment in August that any further investment in Greece is uncertain as the debt crisis deepens. At stake is Deutsche Telekom’s largest business outside Germany and the U.S., where the company is fighting a lawsuit over the $39 billion sale of T-Mobile USA. In addition to slowing client losses and cutting wages in Greece, Nemat will need to push for more drastic measures such as asset sales, analysts say.