TORONTO (Reuters) - The head of Fairfax Financial Holdings (FFH.TO), which bet on the success of a turnaround in Greece last year, urged the country to reach a deal with its counterparts in the euro zone on Friday and remain a part of the currency bloc.
“My message is get a deal done, as removing uncertainty for Greece will be a major positive and it will drive a recovery in the Greek economy,” Prem Watsa, the chief executive of Fairfax and a well known contrarian investor, told Reuters.
Fairfax last year became a key player in the bailout of one of Greece’s largest lenders, Eurobank Ergasias (EURBr.AT), after it bought a 13.6 percent stake in the bank. The Toronto-based firm in April boosted its position in the bank further.
The comments from Watsa, who spoke in a phone interview, came as the European Central Bank expanded emergency funding to keep Greek banks on their feet. A steady flow of withdrawals from the banks continued on Friday ahead of a key summit next week that could decide whether Greece can stay in the euro.
Watsa said he conveyed the message about getting a deal done and removing uncertainty in a meeting a few weeks ago with Greek Prime Minister Alexis Tsipras. He said Tsipras was receptive and encouraged Fairfax’s investments in Greece.
“The two sides are working at cross purposes today, with the Greek government looking at what’s good for Greece and the Troika looking at what’s good for them,” said Watsa. “Eventually there’ll be a deal, because there has to be one.”
Fairfax has also bet on two other Greek companies, building positions in real estate investment company Grivalia Properties (GRIr.AT) and Greek industrial group Mytilineos (MYTr.AT). Both have seen their shares hit by uncertainty around a Greek debt deal.
Even if a deal fails to materialize, Watsa said Fairfax is well positioned to weather the storm.
“Greece, whatever the situation, will need a good banking system,” he said. “Grivalia has got some of the best buildings in Greece with some great long-term tenants. Greece is not going to go away.”
“Our exposure to Greece is very manageable ... We don’t see this as being too much of a concern,” said Watsa, whose bet in 2011 on a turnaround in the fortunes of the Bank of Ireland BKIR.I paid off handsomely.
Reporting by Euan Rocha; Editing by Tom Brown