The main power utility PPC, acknowledging the inevitability of its transformation into a smaller yet possibly more robust corporation in the near future, if its unpaid receivables are effectively managed, is gearing towards appointing a consultant for the preparation of a strategic plan that will map out its business moves over the following five years, at least.
Facing bailout-related market share contraction targets that promise to considerably reduce its size, PPC will be looking to expand into new fields, including gas, with new products and services.
The strategic plan to be prepared will assume a significantly downsized corporation with a far smaller client base and present a business strategy to cope with the sale of PPC units, already widely regarded as an unavoidable development.
To date, PPC officials, in their defense against the bailout-related contraction pressure, have argued that the utility is producing far less electricity (53%) than it is actually selling (88.5%) and is therefore forced to purchase electricity amounts in order to sell. In presenting this argument, PPC officials contend that the forced sale of business units would increase the utility’s operating costs and threaten its sustainability.
Despite their stubborn fight, PPC officials have come to realize that the country’s creditor representatives will remain relentless in their demand for the sale of PPC units, which is severely restricting any leeway for negotiations that could lead to the avoidance of the prospect or delay it.
Officials at the state-run utility, as well as the government, know well that the bailout-related pressure for the sale of units will return in full force this coming summer, or, possibly, no later than the end of the year, once the creditor representatives have conducted a review of the NOME auctions, introduced recently as a tool aiming to reduce PPC’s market share by offering independent traders access to PPC’s low-cost lignite and hydropower sources.
“We are backed by a strong brand name and market presence and intend to utilize the European energy market integration process, especially in the regional Balkan and Italian markets, which interest us,” PPC’s chief executive Manolis Panagiotakis noted recently.
This statement may be interpreted as a declaration that the utility is already preparing for its new life as a leaner and, hopefully, more robust enterprise.
The strategic plan will need to take into account the Greek electricity market’s ongoing liberalization as well as the corporation’s financial woes caused by an alarming unpaid receivables figure now in excess of two billion euros.