Financially pressured PPC, the main power utility, can certainly feel some relief after managing to settle a 100 million-euro bond that matured last Friday and, in addition, being informed of a loan request approval, for 200 million euros, by the country’s four main banks.
According to PPC officials, this loan played no role in the utility’s ability to cover the bond payment. Instead, the utility used funds it managed to raise to meet the bond payment, the PPC sources informed without specifying, while adding that the money expected from the new loan will be used to cover other utility needs.
The loan request approval promises to provide the utility’s coffers with a needed cash injection following a prolonged cash strain.
PPC expects to receive a further estimated 800 million euros this year in fragmented lots from a number of sources.
The utility expects to receive 100 million euros from the Greek State as a deposit payment for public sector electricity consumption in exchange for a discount. PPC is also looking forward to receiving a total of roughly 700 million euros in payments related to the bailout-required split and sale of subsidiary firm IPTO, the power grid operator.
More specifically, China’s SGCC is expected to soon provide 320 million euros as a result of its agreement to acquire a 24 percent stake of IPTO. A further 300 million euros or so is anticipated from the Greek State for the transfer of a 25 percent share of IPTO, while the subsidiary, itself, will return 93 million euros to the parent company as part of the sale plan.
Though the 100 million-euro loan’s endorsement comes as favorable news for PPC, the utility still needs to deal with the inability of its installment-based payback program to rake in unpaid receivables, elevated amid the country’s persisting recession.
A recent re-registration offer extended to clients that missed paying installments through a previous payback program and, as a result, were disqualified, expires today. Few of these clients took up the opportunity to re-register. The payback program expiring today offered PPC clients electricity bill debt settlement through 36 monthly installments.
The subdued response by clients to the initiative will force PPC to revise its collection strategy in a bid to improve its troubled cash flow. PPC sources have made clear that new decisions are now being worked on and will soon be announced.
At this stage it appears most likely that PPC will opt to be less tolerant with clients who are behind on payments and adopt a stricter electricity supply-cut policy.
Not too long ago, a highly ranked energy ministry official informed energypress that a less tolerant stance would soon be enforced. The state-controlled utility will receive political support for a more relentless collections policy, this source had informed.
It remains unclear which client categories will be affected most by a stricter collections strategy. To date, PPC has refrained from cutting electricity supply to clients owing sums of less than 1,000 euros.