ATHENS, Feb. 28 (Xinhua) -- Two of Greece's largest supermarket chains are merging, commencing operations as a new entity from March 1, it was reported Tuesday.
This comes as relief to thousands of employees whose jobs were at risk in a country where one quarter of the working force is suffering from unemployment.
Sklavenitis Group, the third largest supermarket chain until recently, takes over the operation of troubled rival Marinopoulos, Greek national news agency AMNA reported.
The new subsidiary of Sklavenitis Group named "Greek Hypermarkets Sklavenitis" will operate a combined network of 560 stores in Greece and Cyprus, employing about 30,000 people. It will be the largest supermarket network in Greece.
According to a company announcement, all 360 stores of the debt-laden Marinopoulos chain, which was the top supermarket retailer in the country until two years ago, will remain closed on Tuesday to complete technical works and will be reopened gradually.
Under a 470 million-euro (498 million U.S. dollars) agreement reached in autumn, Sklavenitis will sell 22 stores and retain the existing partnership agreements between Marinopoulos and small local suppliers.
Under the deal, which was also backed by Greece's banking system, suppliers will receive 50 percent of the debts owed by Marinopoulos once Sklavenitis completes the acquisition.
The agreement foresees that Sklavenitis will invest 120 million euros and will get a 350 million-euro loan from Greek lenders to pay off part of the Marinopoulos' debt load and make a new start.
Marinopoulos filed for bankruptcy last June, 54 years after launching its first supermarket in Athens, burdened with approximately 1.3 billion euros of debt to the state, banks, suppliers and its 12,000 member staff.
Company managers cited prolonged deep recession which dramatically shrank domestic consumption since 2008 in combination with liquidity problems as the main reasons for its decline
In 2012, French retailer Carrefour pulled out of its partnership with Marinopoulos. In 2014, Marinopoulos had posted 1.6 billion euros annual turnover. For the same year Sklavenitis, which launched its first supermarket in 1969, posted a 1.27 billion-euro turnover.
The introduction of capital controls in Greece in the summer of 2015 was cited as the death knell for Marinopoulos.
Under the rescue takeover agreement, Sklavenitis pledged to retain most of Marinopoulos' 12,000 employees.
According to latest data of the National Confederation of Hellenic Commerce, since 2008 some 250,000 retailers closed due to the Greek economic crisis, resulting in 850,000 unemployed.
