Despite various obstacles, TAIPED to carry on with sale of PPC’s 17%

Though the effort leading to the sale of main power utility PPC’s 17 percent – a stake currently included on the state privatization fund TAIPED’s list of prospective sales – has lingered despite various announcements promising action, the fund can be expected to eventually disregard certain obstacles and launch the process in earnest.

Contrary to other bailout-required privatizations, a schedule for the prospective PPC sale has not been set. This is not surprising as the diminished size of the utility in the near future, following the anticipated sale of corporate units, another bailout demand, remains unknown. In just a few years from now, PPC should measure roughly half its currrent size, both in terms of production units and market share.

Even so, the country’s creditors have applied relentless pressure for the sale of PPC’s 17 percent to go ahead. This insistence forced Greek authorities to take the first needed step in the sale process and announce a tender for the recruitment of a consultant, now headed for completion. The consultant will be tasked with preparing, for TAIPED, a study on the Greek electricity market’s present and future state, including PPC’s role. The findings will be used to shape an optimal utilization plan for PPC’s 17 percent.

As a second step, TAIPED, using this study’s findings, will announce another tender for a financial consultant to be charged with staging the sale’s tender. The timing of this tender’s anouncement will depend on the results of a market test, expected later this year, to measure the level of investor interest in PPC’s unit sale package.

Step number three will entail the evaluation of PPC units included in the sale package. The total value of these will be deducted from the utility’s asset base. TAIPED will use the remainder to calculate the 17 percent stake to be privatized.

If the market test proceeds smoothly, then TAIPED could be in a position to launch a tender inviting investors to subit their expressions of interest for PPC’s 17 percent within the final quarter of 2017. Otherwise, the tender will need to be delayed until 2019 or 2020.

These developments, of course, are based on the assumption that the government will press ahead with the full implementation of bailout measures and avoid delays, as has been the case in the past. Maintaining full punctuality will be quite a challenge for the government given the country’s political and socioeconomic landscape.

The Greek State will be left with a 34 percent stake of PPC once the aforementioned 17 percent stake held by TAIPED is privatized.