GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
For pledges over claims, the agreement must have a certain date, be formally notified to the debtor and be registered in the Electronic Pledge Registry to be effective against third parties. For shares and bonds listed on the Athens Exchange, perfection remains governed by the rules of the Cen - tral Securities Depository (ATHEXCSD) through the Dematerialized Securities System (DSS). Greek Law 3301/2004, transposing the EU Financial Collateral Directive and applying to financial collat - eral arrangements for specific eligible assets (cash, shares, bonds, claims), requires only written evidence of the agreement (even electronically). The collateral- taker must be an eligible entity under the law, includ - ing financial institutions. Private credit funds may qualify as “other financial institutions” if regulated and licensed in their home jurisdiction in line with the EU Directive. Improperly perfected security interests do not pro - duce effects erga omnes. As a result, other creditors may validly establish security interests over the same assets, which will take precedence in enforcement proceedings. Regarding costs, please refer to 4.2 Other Taxes, Duties, Charges or Tax Considerations . The time required for the establishment of security interests is generally limited and depends primarily on the parties involved. However, delays may occur in the registration of mortgages or prenotations of mort - gages, depending on the efficiency of the competent cadastre. 5.2 Floating Charges and/or Similar Security Interests Greek law permits floating charges from businesses to businesses, over a group of movable professional assets and rights. Floating charges over assets located in Greece require registration in the Electronic Pledge Registry. The charge maintains its floating nature until an event of default occurs or another agreed-upon occurrence takes place, which then triggers its crys - tallisation into a fixed charge.
Security over future assets and claims is also permit - ted, if they are at least definable. However, a univer - sal security interest or a general deed of charge over all assets and claims of a company is not permitted; instead, security must be granted on an asset-by- asset or claim-by-claim basis. Both pledges over specific assets and floating charges are used in the Greek market. 5.3 Downstream, Upstream and Cross- Stream Guarantees The Company Law permits downstream, upstream and cross-stream guarantees, provided they align with “corporate interest” and meet strict transparency requirements. Specifically, an SA cannot guarantee a third party’s debt for the benefit of a related entity with - out prior board approval, public filing with the General Commercial Registry (G.E.MI.) and a ten-day waiting period for minority shareholder objections. For listed companies, this process is more rigorous, requiring a fairness opinion from an independent auditor to con - firm that the transaction is fair and reasonable for the company and its non-related shareholders. Certain exemptions streamline these requirements, particularly for downstream support where a parent guarantees the obligations of its 100% subsidiaries, or for transactions conducted in the “ordinary course of business” under normal market terms (arm’s length). Transactions in Greece are commonly structured to mitigate legal limitations – such as corporate ben - efit issues – by utilising on-lending mechanics and guarantee fees. When debt is structured into differ - ent tranches with varying guarantee levels – such as a senior term facility and a revolving working capital facility – the allocation of proceeds is primarily man - aged through intercreditor agreements. 5.4 Restrictions on the Target Under the Company Law, an SA is prohibited from providing financial assistance – including down pay - ments, loans or guarantees – to third parties for the purpose of acquiring its own shares (or shares of its parent company). This prohibition may be lifted if the following cumulative conditions are met. • The transaction must be carried out under the board’s responsibility at market-standard terms
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