Mytilineos pessimistic on PPC units sale, also supportive

Evangelos Mytilineos, the chief executive of the Mytilineos group, a key player in Greece’s energy market, has offered analysts a grim view on the prospects of the main power utility PPC’s upcoming bailout-required sale of production units, noting that it will be particularly difficult for the utility to sell a lignite-only package that does not include hydropower units.

However, Mytilineos also offered support to PPC, facing various issues, by stressing that the utility stands as a vital market component and is needed by all.

The Mytilineos chief’s opinion on PPC’s upcoming attempt to sell production units is crucial as the Mytilineos group is regarded as a major contender.

The group recently proceeded with a bond issue to raise capital for the prospective PPC unit sales and be ready to buy if the utility’s offer is worth investing in.

A market test determining the level of investor interest in PPC’s lignite-only production units sale package will soon be staged.

Mytilineos offered understanding and support to PPC in its quest for Public Service Compensation (YKO) retroactive returns concerning 2012 to 2014. RAE, the Regulatory Authority for Energy, recently set the amount at 360 million euros, well under the 735 million euros demanded by the utility.

“Generally, we’re with PPC and aware of the difficulties the company is facing. We know, for example, what is going on with the YKO issue,” noted Mytilineos, therefore becoming the utility’s first rival to officially back PPC.

Last December, the Mytlilineos group – one of Greece’s leading industrial groups with activities in the sectors of EPC (Engineering-Procurement-Construction), Metallurgy & Mining, and Energy – offered crucial financial support to PPC by agreeing to take up an offer and prepay a 100 million-euro amount for electricity to be consumed by the industrial group in 2017.

This cash injection offered vital relief to PPC, burdened by poor cashflow as a result of an alarming unpaid receivables problem. Many electricity consumers have struggled to meet electricity bill payments amid Greece’s ongoing recession.

RAE’s recent move to limit PPC’s retroactive YKO return to less than half the amount claimed by the utility comes as a further cashflow setback for the utility.

“The Greek market needs a strong PPC as much as it does market liberalization,” Mytilineos remarked. “If PPC falls into even bigger problems then this will be a bad development for all of us in the market,” he added.