PPC to seek loan collateral split with IPTO holding company

The main power utility PPC has failed to secure any considerable gains from a general shareholders’ meeting decision yesterday that permits its subsidiary IPTO, the power grid operator, to break away from the utility as part of the operator’s bailout-required sale procedure.

Besides offering – essentially without anything in exchange – 51 percent of IPTO to the operator’s holding company, as part of the government’s aim to ultimately transfer 51 percent to the Greek State, PPC’s debt burden has not been lightened.

However, the utility believes that the wording of a letter extended by the country’s four main banks to PPC ahead of their delivery of a loan worth 200 million euros will enable the utility to negotiate its way out of being fully responsible for a 300 million-euro security pledge required as collateral.

The power utility will seek to limit its collateralization commitment to between 60 and 70 percent of the 300 million-euro amount, leaving the other 30 to 40 percent for IPTO’s new holding company. IPTO dividends will provide the only source of revenue for this holding company.

The loan, to be granted to PPC after lengthy negotiations, as well as the power utility’s belief that leeway exists to discuss the collateral commitment’s division, provide some compensation for PPC’s painful yet unavoidable decision to allow the IPTO split.

PPC needs to cover a 200 million-euro company bond that is set to expire this coming May.

A demand on PPC by the four banks, seeking the transfer of 120 million euros worth of existing PPC loans to the new IPTO holding company, as a prerequisite for their endorsement of the IPTO split, was discussed until late last night but failed to produce results, according to sources, as this would have required time-consuming amendments amid a tightening sale schedule.