Lenders want private investor to manage new IPTO company

The country’s lenders have added a new management-related condition to the alternative IPTO plan being worked on to avoid the power grid operator’s privatization.

The lenders, who had accepted a Greek proposal for the establishment of a new company to take on the operator’s fixed assets, are demanding that the new company’s management be assumed by the prospective private-sector company to enter the deal as a strategic investor, regardless of the stake it will hold in the new company. Based on the plan, the Greek state will hold a 51 percent stake in the new company.

In a preceding condition, the lenders had demanded that the new company will need to be supervised by a ministry other than the energy ministry, such as the finance ministry.

The latest management-related demand for the new IPTO-linked company has prompted concern at the energy ministry, which fears the state would lose control of the country’s networks.

Negotiations on the IPTO plan are carrying on, but the time left for the achievement of a finalized deal is running out. Greece has already received an informal extension to a previous deadline, but as things stand, the IPTO matter will probably need to be resolved within the next two to three weeks.

If the latest management condition is resolved, then one final obstacle will need to be cleared, concerning payment to IPTO’s parent company, PPC, the main power utility, for the transfer of its fixed assets to another company.

Quite clearly, the state is not in a position to be able to pay an amount of at least 600 million euros, the estimated value of IPTO’s 51 percent. Energy minister Panos Skourletis confirmed yesterday that a plan to pay PPC through future IPTO dividends, combined with a share swap of shares held by the state in other energy-sector companies and utilities, was now being re-examined. Although Skourletis did not name any companies, he has mentioned firms such ELPE (Hellenic Petroleum) and EYDAP (Athens Water Supply and Sewage Company) in the past.

PPC chief executive Manolis Panagiotakis disagrees with the prospect of PPC selling its fixed assets. He is demanding financial results of equal worth.

“Political negotiations are conducted by the government, not PPC,” Skourletis remarked, when asked to comment on the power utility chief’s position.