The coinciding general shareholders meetings today at main power utility PPC and DEPA, the Public Gas Corporation, symbolize, in a sense, concurrent developments in the electricity and natural gas markets that are leading the country towards a new-look energy sector.
At PPC, barring no unexpected developments, shareholders are expected to approve the recent announcement of SGCC, the State Grid Corporation of China, as the prefered strategic investor of an international tender offering a 24 percent stake of Greece’s power grid operator IPTO, until now a wholly owned PPC subsidiary. SGCC emerged as the winning bidder with a 320 million euro offer.
Based on the sale plan, the prospective buyer will need to submit a six-month letter of guarantee of 20 million euros. Also, in 2017, PPC will be the recipient of dividends to be distributed by IPTO for the 2016 financial year. These will be worth 35 percent of IPTO’s net profit.
Another clause in the sale agreement specifies that a 5 percent surcharge will be added to the 320 million euro sale price if the transfer of shares from IPTO to SGCC is not completed within 2017. If needed, a further 4 percent will be added for 2018.
Also, SGCC will not have the right to transfer its stake in IPTO for a two-year period.
The sale’s terms also obligate IPTO to pay PPC of 131 million euros minus taxes as a cash upstream payment, which, according to sources, represents a return of capital as a result of the capitalization of fixed assets at IPTO.
At the DEPA meeting, also today, shareholders are expected to endorse the natural gas distribution division’s split from the corporation as a step towards establishing a new wholly owned subsidiary to handle natural gas distribution to new networks in urban centers such as Halkida, Lamia, Thebes and Livadia, whenever the required infrastructure in these regions is developed.
The new DEPA subsidiary will be granted full independence. The parent company will not have a say in its administrative matters, including choice of board.
Ultimately, once all distribution activity is taken away from DEPA, the parent company will focus on matters such as supply, trade and international contracts.