Frozen funds, fleeing tourists: Greek startups feel the pinch

http://www.ekathimerini.com/199265/article/ekathimerini/business/frozen-funds-fleeing-tourists-greek-startups-feel-the-pinch



Frozen funds, fleeing tourists: Greek startups feel the pinch
BUSINESS 10:11
MARCO BERTACCHE, PAUL TUGWELL & JOE WEISENTHAL

Before Greece’s capital controls, Hellenic Seaplanes SA had an expansion plan and investors to back it.

Banking on a tourism boom, it was set to have opened a network of 112 water aerodromes by the end of the year to serve the country’s hundreds of islands. Then came the Greek government’s referendum announcement, a bank holiday and capital controls. Investors froze funding and tourists began to cancel bookings, forcing the company to put its project on ice.

With Greece’s capital controls in their 12th day, promising startups that had expected to ride the few bright spots in an economy struggling to exit six years of near-total recession are being hit hard. The controls and Greek people’s rejection in the referendum of the terms attached to a bailout deal spooked investors and forced companies to curtail ambitions.

They “created some angst among our investors that led them to freeze much-needed capital until things get back to normal,” Hellenic Seaplanes Chairman and Chief Executive Officer Nicolas Charalambous said in an interview from Athens. The company is hanging tight, believing tourism will remain “the heavy industry of Greece, no matter what.”