SGCC, the State Grid Corporation of China, has produced the highest bid, 320 million euros, for a 24 percent stake of IPTO, the power grid operator, in an international tender staged by the operator’s parent company PPC, the main power utility, the latter has announced.
PPC’s board is now expected to declare SGCC as the preferred bidder on October 31 before the Chinese company’s acquisition is made official at the utility’s upcoming general shareholders meeting, scheduled for November 24.
Italy’s Terna also submitted a binding bid, while France’s RTE, the other qualifier through to the final stage, opted to withdraw.
The Greek government appears satisfied with the price level achieved following the IPTO sale procedure’s drastic revision, engineered by the current energy minister Panos Skourletis, who cancelled the previous administration’s plan to sell 66 percent of the operator.
Instead, he restructured the sale, offering 24 percent of IPTO to a strategic investor as the procedure’s first step, now being completed. A further 25 percent of the operator is planned it be sold through the bourse, while 51 percent will be transferred from IPTO to the Greek State.
A comparison of the two sale plans indicates that the new version has produced a better deal for Greece. Based on an evaluation of IPTO conducted during the previous plan’s sale attempt, 24 percent of the operator is worth 221 milllion euros, given the 921 million-euro value set for all of IPTO. Taking this into account, the 320 million-euro binding bid submitted by SGCC for 24 percent of IPTO is a good offer. Of course, clearer judgement will be made possible when the result of an independent evaluation, conducted by Barclays, is disclosed.
Once the preferred bidder is officially announced, the next step will be to finalize a Share Purchase Agreement and a Shareholders Agreement. The sale is expected to be completed early in 2017, when follow-up procedures for the privatization of a 17 percent stake of PPC are scheduled to commence.