Lenders blocking government bid to avoid sale of PPC’s 17%

The country’s lenders have raised strong objections to the government’s intention of transferring a 17 percent stake of the main power utility PPC from TAIPED, the state privatization fund, to the new super-privatization fund, a move that would prevent the direct sale of this utility stake, currently belonging to the Greek State.

The PPC issue represents one of the main stumbling blocks between the government and lenders amid the bailout’s troubled and ongoing second review.

A 34 percent stake of PPC that is owned by the Greek State has already been transferred to the super-privatization fund. The government is pushing to also have the Greek State’s other 17 percent stake in PPC transferred to the super-privatization fund, which would safeguard the Greek State’s 51 percent in PPC against any immediate privatization attempt.

Unlike TAIPED, whose sole task is to privatize Greek State assets under its control, the super-privatization fund, introduced recently by the current government, is seen as a reform service responsible for better utilizing the Greek State’s assets and interests in a bid to boost revenues and avoid their privatization.

Delays encountered with TAIPED’s Asset Development Plan, according to which a consultant was to be hired last September for the privatization of the Greek State’s 17 percent of PPC, have further soured the bailout review negotiations. Despite assurances by the Greek side, a consultant has yet to be hired.

In its attempt to delay the sale of the Greek State’s 17 percent share of PPC, the government argues that the utility’s bourse value is currently lying extremely low, meaning that any sale, at present, would offer little debt relief.