Greece's biggest company, Coca Cola Hellenic, is leaving the country, the drinks bottler said on Thursday as its move to Switzerland and a London listing for its shares dealt a blow to the crippled Greek economy.
The immediate material impact on Greece is limited - its Greek plants stay open and CCH said the small portion of it activity that the world's second-ranked Coke bottler has in Greece will be unaffected. But analysts quickly saw it as bad news for a nation struggling to compete inside the euro zone.
CCH, which has said it fears the Greek crisis could disrupt its multinational business, said in a bourse filing in Athens that shareholders, most of whom are abroad, will exchange their stock for shares in Coca Cola HBC AG, based in Switzerland and effectively shorn of the Greek tag "Hellenic".
That stock will be primarily quoted on London's LSE.
"A primary listing on Europe's biggest and most liquid stock exchange reflects better the international character of Coca Cola Hellenic's business activities and shareholder base," the company said in its regulatory statement.
The firm, in which The Coca-Cola Co of the United States has a 23-percent stake, bottles Coke and other produce in 28 countries from Russia to Nigeria. About 95 percent of its shareholders and business activity are outside Greece.
"This transaction makes clear business sense," chief executive Dimitris Lois told analysts in a conference call. An overwhelming majority of shareholders have already accepted moving a company which has long complained about Greek taxes.
Analyst Manos Hatzidakis of Beta Securities in Athens said that the move made sense for the firm, which follows Greek dairy group FAGE this month in seeking a low-tax, low-volatility haven for its corporate base - in FAGE's case Luxembourg.
"The Greek bourse is losing a very good company and the London Stock Exchange is gaining a very important group," said Hatzidakis. "It's very bad news for the Greek economy and bourse."
For brokers on the stock exchange, losing a stock that made up 8 percent of daily turnover this year will be unwelcome - especially since total volumes are down by half since last year.
For the Greek treasury, the loss of tax revenue is unclear. Though CCH officials did not detail tax savings from moving the registered office to Switzerland, it has complained of high - and increasingly unpredictable - taxation in crisis-hit Athens.
But the move may further discourage investment in Greece.
Trade unionists saw the corporate exodus as immoral and one, Stathis Anestis, spokesman for the biggest labor group GSEE, suggested a boycott of Coke : "This is unacceptable," he said.
"CCH and FAGE are speculating at the most crucial moment for the Greek economy and the Greek people. Consumers should use their power to punish these companies."
One analyst said CCH, which rose to the top of corporate rankings as the values of Greek banks collapsed, was out to rid its share price of such risks associated with Greece; the country is mired in recession and facing mass discontent as its leaders slash budgets to meet international creditors' terms for loans intended to keep Athens inside Europe's single currency.
"This is a healthy company that does not want to suffer from Greece's high country risk," said the analyst, who spoke on condition of anonymity.
Foreign investors have been steadily reducing their investment in the Athens Stock Exchange since the country was engulfed by the sovereign debt crisis in 2009. Greece's future in the 17-nation euro zone still remains in doubt.
Aided by the fact that it is doing most of its business outside Greece, CCH consistently outperformed the general Athens stock market index, which has slumped to 20-year lows.
CCH has become the country's biggest firm by market value with a capitalization of around 6 billion euros ($7.7 billion), representing about a fifth of the Athens bourse's total.
The company, which last year made net profit of 330 million euros on sales of 6.85 billion, has complained of taxes imposed under Greek government austerity measures. A U.S. filing shows it paid about 20 million euros in both 2009 and 2010 for one-off "social responsibility" levies in Greece.
Profits at operating units in other countries are generally taxed locally. The Greek parent company reported 32 million euros in Greek taxes in 2010 and none last year. New withholding tax on dividends in Greece might have affected CCH in future.
In its U.S. filing for 2011, the company said: "Greece, which accounted for approximately 6 percent of our unit case sales volume and approximately 8 percent of our net sales revenue in 2011, is currently facing a severe economic crisis resulting from significant government fiscal deficits and high levels of government borrowing."
"The ... Greek government debt crisis may have impacts on our liquidity that currently cannot be predicted."
CCH said it would delist from the Athens Stock Exchange and then seek to re-enter that bourse with a secondary listing.
Coca Cola Hellenic shares closed down 4.9 percent at 15.66 euros in Athens. Analysts explained the drop by the low cash price of 13.58 euros the company is offering to those shareholders who refuse the offer of new Swiss shares. ($1 = 0.7751 euros)
(Additional reporting by Lefteris Papadimas, Matt Robinson and Renee Maltezou in Athens and Tom Bergin in London; Writing by Alastair Macdonald)