A proposal forwarded by a trio of consulting firms hired to assist with the financial details of the IPTO (Greece’s power grid operator) split from main power utility PPC, its parent company, for a 51 percent transfer to the Greek State, aims to avoid burdening the state budget and the country’s debt level.
According to energypress sources, the proposal put forth by the three consulting firms – Lazard, Sol, and Norton Rose Fullbright – for PPC’s compensation package to be covered by the Greek State for its 51 percent acquisition of the operator, notes that payment should not stem from the state’s coffers, but, even so, must be provided either in cash or through measures of equivalent worth. This part of the compensation package will be offered to PPC in addition to the amount to be paid by the bidding strategic investor, for a substantial stake, and other investors, for additional stakes, all adding up to 49 percent.
PPC could be compensated through entitlement to a percentage of IPTO’s earnings in the form of dividends, but not over a long-term period, the consulting firms have suggested. Another suggestion forwarded entails capitalizing IPTO assets prior to the split and forwarding the resulting funds to PPC.
The consulting firms forwarded their suggestions to Greece’s lending institutions on Friday, which, in turn, are now working on a final proposal to be made at the imminent euroworking group, on April 22.
Reliable sources noted that the lenders will not raise technical obstacles and move positively at the euroworking group. In other words, they will ascertain that their proposal lies within the EU’s institutional framework and does not create any state debt-level pressure.
In this case, the Greek government and lenders will, by the end of April, need to draft a final version of the agreement to take effect between the Greek State and lenders. Deadlines will be included in this text.
Negotiations on the procedure’s scheduling are expected to be tough. The lenders are expected to push for tight deadlines with the aim of getting as much done within 2016, or even finalizing the sale within 2016. Lenders have already asked for an official announcement of the IPTO sale to be made in June. On the other hand, the Greek government prefers a more relaxed schedule, which it believes is more realistic. This could mean launching the sale within 2016 without demanding binding offers in the current year.