PPC units sale second-round deadline set for October 7

Participants through to the second round of the main power utility PPC’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity have been given 90 days, as of July 7, to submit binding offers, according to the second round’s terms, just revealed to qualifiers.

This sets an October 7 deadline for what represents the first major step to be taken by the power utility towards its future role in the energy market.

The corporation’s overall restructuring, to be based on a new strategic plan being prepared by PPC with consulting firm McKinsey – commissioned by the power utility last year – will represent the second, and most fundamental, step towards PPC’s future shape and role.

McKinsey delivered its plan last month following a six-month extension that was needed as a result of reactions by the power utility and energy ministry against certain proposals.

The consultant’s strategic plan, in its finalized form, will be presented to PPC’s board today, according to sources. Adjustments are believed to have been made as a result of major developments at PPC, including the refinancing of a loan extended to PPC by the country’s main banks.

The main aspects of the consultant’s draft plan, parts of which were leaked earlier this year, are expected to remain intact. These include recommendations for a turn by PPC to new business activities, including in the RES and natural gas markets, as a means of offsetting revenue losses as a result of the lignite unit sale and market share contraction concerning electricity supply; improved efficiency in various sub-sectors; and better utilization of personnel.

An initial McKinsey recommendation for tariff hikes, which would limit the benefits of a 15 percent discount offered by PPC to punctual customers, is expected to be limited following a reaction by the energy ministry.