IPTO talks on the right track, government officials inform

Greek government officials are optimistic about the prospects of an agreement with the country’s creditor representatives on a locally proposed plan to split the power grid operator IPTO from its parent company PPC, the main power utility.

Officials involved in the negotiations informed energypress that positive thoughts expressed by the lenders on the plan in January were sustained during a teleconference held yesterday, adding that the fundamentals of a decision reached in December are being maintained.

Questions asked by the lenders during yesterday’s teleconference sought clarification of various details and were not extended to doubt or undermine the plan, the local officials contended.

The government’s plan is focused on the scheduling and method of compensation for PPC, as well as on details concerning the involvement of a prospective strategic investor in the deal, including terms and prerequisites.

The local plan entails transferring 51 percent of IPTO to the Greek state for a price, placing 29 percent on the bourse, and selling 20 percent to a strategic investor.

As was recently reported by energypress, a study conducted by international consultants, on behalf of the creditor representatives, recommends that the strategic investor’s stake in IPTO could range between 20 and 30 percent. Offering stakes to other institutional investors as well has come under consideration. The remaining minority equity share would then be placed on the bourse.

As for the new IPTO firm’s management, a twin role involving both the public and private sectors is likely to be adopted, similar to an exisiting model at ELPE (Hellenic Petroleum), an enterprise in which the Greek state controls 35.5 percent of ELPE, while Paneuropean Oil, a member of the Latsis corporate group, holds 40.98 percent.

The majority of board members and president at IPTO will stem from the public sector, while the managing director will be provided by the strategic investor, according to the IPTO plan. In other words, the operator’s prospective strategic investor will not only hold a minority stake but also stands to play a co-managerial role, based on specific terms.

According to government sources, the IPTO matter will need to proceed and be finalized concurrently with a first review of the NOME plan, now believed to be headed towards an agreement.

Intended to provide third parties with access to main power utility PPC’s low-cost lignite and hydropower sources, the latest news on the NOME plan suggests auctions will offer one-year agreements, not three-year agreements as had been originally proposed. Also, wholesale market conditions concerning System Marginal Price (SMP) levels will be taken into account.