Seeking a solution to avoid privatization of IPTO, the power grid operator, Greek officials, as their latest proposal to the country’s lenders, will table a plan entailing a stock split of parent company PPC, the main power utility, for the creation of a new IPTO company reflecting PPC’s equity make-up and which would adopt the utility’s fixed assets.
The Greek state would hold a 51 percent equity share in the new IPTO corporate entity carrying PPC’s fixed assets if this proposal is accepted by lenders, while private-sector shareholders would control the other 41 percent.
More specifically, the PPC stock split proposal would offer the Greek state a 34.12 percent stake in new IPTO company, TAIPED, the State Privatization Fund, would control 17 percent, Silchester would own 13.8 percent, Fidelity 5 percent, and small shareholders would control 30 percent through the bourse – a precise reflection of PPC.
The previous proposal by Greek officials, rejected by the country’s lenders, would have provided the state with a 51 percent share of the new IPTO entity and PPC the other 49 percent. Lenders do not want PPC to maintain any corporate links with its subsidiary firm IPTO.
Greek officials believe their latest proposal satisfies the ownership criteria set for IPTO, locally acronymed ADMIE, by lenders. If so, the next step in the process would involve compensating PPC for its loss of fixed assets. Local officials suggest compensating PPC over a ten-year period through IPTO’s profit.
Even if the negotiating sides agree on all the aforementioned matters, the management issue will need to be resolved. Lenders demand that the new IPTO firm be managed by a private-sector strategic investor, regardless of the stake held in the new company. Greek officials have rejected such a prospect.
Initially, this new IPTO firm would not be listed but could enter the bourse later on, according to the Greek plan.