The main power utility PPC, like all other Greek State assets transfered to the country’s new privatizations superfund, the Hellenic Corporation of Assets and Participations (HCAP), has been included in a 25 billion-euro guarantee offered to the country’s lenders for an 86 billion-euro loan received by Greece three years ago though the third bailout.
This effectively means that HCAP will maintain the right to liquidate its stake held in PPC, like all other Greek assets transferred to the privatization fund, until 2047 if the Greek State requires support to achieve its fiscal obligations.
For the time being, the privatizations superfund’s plan for PPC is moving away from such a prospect and aiming to restructure the power utility as a more efficient and profitable enterprise that will offer improved services to customers at the lowest possible cost.
A few months ago, the new privatizations superfund forwarded a strategic plan to PPC administration underlining the power utility’s widely known issues, as well as new proposals, to help the firm enter a new chapter in its corporate history.
Proposals include a voluntary exit program for all employees eligible for retirement. PPC’s boss Manolis Panagiotakis has also pointed out this need on a number of ocassions. The HCAP strategic plan also underlines the need for PPC to reexamine its overtime and seasonal employment policies, as well as the utility’s overall workforce. PPC currently employs 3,433 staff members at mines, 4,671 at power stations, 971 in the commerce division, and 1,515 in administration.
HCAP also wants the utility to reexamine a plan that would offer private-sector companies a slice of utility’s customer base. This plan has stalled.
The privatization fund has also advised PPC to reexamine its retail network and pricing policies.
Detailed reference has also been made to a series of challenges faced by the power utility such as its extraordinarily high level of unpaid receivables, a bailout-required market share contraction and a subdued cashflow. Reduced operating profits between 2018 and 2020 are possible at PPC as a result of these issues, the privatization fund noted.
PPC needs to reduce its retail and production market shares to less than 50 percent by 2020 and also disinvest mines and power stations representing 40 percent of its lignite capacity. In addition, the utility will need to adapt to an EU policy aiming to increase the share of renewable energy in the continent’s energy mix. The wholesale market also needs to be reformed in line with the Target Model, aiming to harmonize the electricity wholesale market with EU standards.
Given all these factors, the privatization fund has advised PPC to reexamine its investment plan and reshape as a modern energy company. This plan anticipates an entry into the natural gas market and a reduction of the utility’s unpaid receivables figure, currently estimated between 2.3 and 2.7 billion euros.