Newly appointed energy minister Costis Hatzidakis will need to take on the tough task of resolving matters at Larco, the troubled state-controlled nickel producer currently ranked as the power utility PPC’s biggest debtor.
The country’s recently elected conservative New Democracy government is well aware of the magnitude of the issues plaguing Larco – stuck in a loss-incurring rut and owing an increasing amount of unpaid receivables to PPC – and appears most likely to tackle the matter further down the road.
Even so, the state-run producer’s new administration could be announced within the next few days.
“The choice of officials to be seated on Larco’s electric chairs will signal the government’s determination to also tackle this problem in the state utilities sector,” one legal official noted.
The financial condition at the nickel producer appears incurable despite efforts made by the country’s previous Syriza administration.
Larco has not issued a balance sheet in four years. The producer has also been ordered to return state aid worth 135.8 million euros, according to a European Court verdict.
Its debt to PPC for electricity supply now exceeds 310 million euros. Larco recently defaulted on a installment-based payback agreement with the power utility. This has increased the likelihood of a power supply cut to the producer.
The producer’s acute condition has virtually eliminated any chance of a privatization procedure, making compulsory liquidation the most probable outcome.