bailout agreement

No extra time for PPC units sale, advisor HSBC informs

Posted on by admin

Prospective buyers taking part in the main power utility PPC’s bailout-required disinvestment of lignite units will need to submit their binding offers by the sale’s current January 23 deadline, at 12 pm, the procedure’s financial advisor HSBC has informed, dispelling rumors of a new deadline extension, energypress has understood.

Even so, participants will most likely remain adamant and request additional time as a number of matters concerning the disinvestment remain unclear. These include the outcome of a voluntary exit plan for employees at two power stations, Megalopoli and Meliti, included in the sale, and PPC’s ongoing negotiations with the owners of the Ahlada lignite mine, feeding the Meliti power station, for a lower supply price and longer supply agreement.

A comprehensive post-bailout review of Greece’s reform commitments is currently in progress. Keen for approval from the country’s lenders for the ongoing PPC disinvestment, the government will avoid taking any initiatives that could make it accountable for any further delays of the sale effort.

NOME auction rescheduled for February 8 amid pending issues

Posted on by admin

RAE, the Regulatory Authority for Energy, has rescheduled the country’s first NOME auction for the year from January 23 to February 8, a key reason being to enable additional time for the introduction of a measure intended to restrict exports of electricity amounts acquired at the auctions.

The Energy Exchange, participating in a public consultation procedure concerning the matter, needs to submit supplementary observations on the export-limiting measure before the plan is implemented on time for the auction in February. A short follow-up public consultation procedure will need to be wedged into the process.

The anticipated outcome of the main power utility PPC’s bailout-required disinvestment of lignite units is another reason for the auction’s rescheduling. Just days remain before the sale’s January 23 deadline for binding bids expires, unless an extension is granted, which could be necessary as a result of various unresolved matters.

The disinvestment’s outcome will determine whether an additional 520 MWh/h electricity amount is added, as a penalty, to the year’s NOME auction total of 1,444 MWh/h because of PPC’s failure to reach a retail electricity market share contraction target of 62.24 percent set for the end of 2018. The end-of-2019 target imposed on PPC is 49.24 percent.

RAE will need to decide, by the end of this month, on how penalty electricity amounts will be distributed to the year’s NOME auctions.

PPC widens voluntary exit plan eligibility, limits food allowance

Posted on by admin

The main power utility PPC’s severance pay of 15,000 euros offered to employees agreeing to depart through the corporation’s voluntary exit plan will now also be made available to staff members who have been employed at the company for at least 25 years, not just older personnel eligible aged at least 62 and eligible for retirement, PPC’s administration has decided at a board meeting.

The measure, part of a PPC personnel restructuring plan prepared by the consulting firm McKinsey that includes more flexible labor terms for new and outgoing employees, incentives and staff redistribution, aims to lower the average age of the power utility’s workforce, currently numbering approximately 10,000, to less than 50, the current average age.

So far, the voluntary exit plan has been accepted by 273 employees at two lignite-fired power stations, Megalopoli and Melit, included in PPC’s bailout-required disinvestment of lignite units, as well as a further 220 employees at other divisions and units.

It remains to be seen if PPC will succeed in reducing its payroll by approximately 4,000 employees for cost savings of 330 million euros, as McKinsey has advised in its business plan for the Greek power utility.

As part of the corporation’s wider cost-reduction measures, the PPC board has also decided to reduce a food allowance offered to employees to 3.40 euros per day from its previous level of 6 euros per day over the next three years.

PPC lignite unit contenders up pressure, new deadline possible

Posted on by admin

Three contenders considering the main power utility PPC’s sale of its Megalopoli and Meliti lignite-fired power stations included in a bailout-required disinvestment of lignite units are intensifying their pressure on PPC for more favorable terms as the deadline for binding bids approaches.

In response, PPC has been eager to present any new favorable developments that have emerged from the implementation of incentives in an effort to support the sale’s conditions and price-tag potential.

This was demonstrated yesterday by chief executive Manolis Panagiotakis in comments to journalists.  He made reference to the results of a voluntary exit plan offered to employees at the Megalopoli and Meliti units, both loss-incurring. A total of 360 employees working at the two lignite-fired power stations have accepted the offer. Prospective buyers have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248 prior to the voluntary exit plan, to be cut down to 600. PPC has just announced a voluntary transfer plan for Meliti and Megalopoli unit employees to other company posts.

Panagiotakis also noted PPC is negotiating with the owners of the Ahlada lignite mine, feeding the Meliti power station, for a lower supply price and longer supply agreement.

Reacting to the PPC chief’s comments, China’s CHN and the Copelouzos group’s Damco, one of the sale’s three potential bidding teams, described the results of the staff reduction effort at the two power stations as a good basis for cost reduction.

A consortium comprising the Czech Republic’s Seven Energy and Gek Terna has refused to comment. The Seven Energy firm has yet to present itself as a certain participant in the sale. In recent times, it has made note of narrow profit margins despite the voluntary exit plan, CAT remuneration uncertainties surrounding for the two units, and increased CO2 emission right costs.

Panagiotakis, the PPC chief, yesterday told journalists the Mytilineos group remains a contender for the Megalopoli and Meliti power stations. The Mytilineos group has not responded but, according to sources, remains troubled by what it sees as an unfavorable investment conditions surrounding the lignite sector, including the sharp rise in CO2 emission right costs.

Just days remain before the sale’s January 23 deadline for binding bids expires. An extension could be required as a result of PPC’s last-minute Ahlada mine negotiations and a Brussels delay concerning the European Commission’s position on Greece’s CAT remuneration mechanism proposal, a crucial factor for the lignite units sale.

 

 

Swift Brussels response on CAT plan promised by Moscovici

Posted on by admin

Greece has been promised solid indication of the European Commission’s intent on the country’s effort to secure CAT remuneration for two lignite-fired power stations, Megalopoli and Meliti, included in main power utility PPC’s bailout-required disinvestment of lignite units.

CAT remuneration for the power stations is seen as a crucial incentive to draw investors to the sale.

Though Brussels is not expected to deliver its decision on Greece’s CAT plan any sooner than April, which stretches well beyond the schedule of PPC’s ongoing disinvestment effort, the European Commissioner for Economic and Financial Affairs Pierre Moscovici, who met yesterday with Greek energy minister Giorgos Stathakis, is believed to have promised a swift response in the form of notification.

PPC has already announced it will upload this notification, regarded as the European Commission’s final position with virtually absolute certainty, into the disinvestment’s data room for investors to appraise. The European Commission’s views on the Greek CAT proposal’s details, including duration, remuneration levels and procedures, are expected to be included in the notification.

Stathakis, the energy minister, also held another important meeting yesterday with officials of EVIKEN, the Association of Industrial Energy Consumers, to discuss the government’s efforts aimed at securing  Greece’s demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry.

EVIKEN officials emerged content from the meeting and confident the energy ministry is committed to this effort. Details concerning the ministry’s moves to be made on the matter have not been disclosed.

PPC voluntary exit plan’s payroll cost savings estimated at €21.2m

Posted on by admin

The main power utility PPC’s voluntary exit plan offered to staff at the corporation’s loss-incurring Meliti and Megalopoli power stations will produce payroll savings of more than 21.2 million euros for the corporation, energypress sources closely following the power utility’s bailout-required disinvestment of lignite units, which includes the aforementioned facilities, have informed.

A total of 360 employees working at the two lignite-fired power stations have accepted PPC’s voluntary exit proposal, offering 25,000 euros in severance pay.

A total of 243 PPC employees at the Megalopoli unit have registered for the voluntary exit plan. Their total payroll cost for the corporation has been estimated at 14.5 million euros. In addition, 76 Megalopoli unit employees departed in the previous six-month period for severance pay amounts of 15,000 euros. Their payroll cost reduction is estimated at 4.5 million euros, which brings the tally of the payroll cost reduction for all 319 employees to nearly 19 million euros.

As for the Meliti unit, a total of 41 employees have agreed to leave, producing payroll savings of 2.2 million euros.

Prospective buyers have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248 prior to the voluntary exit plan, to be cut down to 600.

PPC yesterday announced a voluntary transfer plan for Meliti and Megalopoli unit employees, offering jobs at other power utility posts, sources informed.

The response of employees to this transfer offer is expected to be subdued as workers will take into account the distance factor. Most available posts are believed to be situated in the Athens area, not close to the Florina and Arcadia locations of the two units.

On another front, PPC and the owners of the Ahlada lignite mine feeding the Meliti power station are engaged in talks to resolve issues concerning their supply agreement, whose  whose pricing and quantity details are vague. The supply agreement will be taken on by Meliti’s prospective new owner.

 

 

 

Privatizations, energy-climate plan the focus of technocrats

Posted on by admin

A team of technocrats representing the country’s lenders and currently in Athens for preliminary talks with local officials ahead of next week’s arrival of creditor representatives for work leading to a progress report have already made clear the issues of greatest concern for the lenders.

The visiting technocrats are focusing on the completion of energy market reforms; bailout-required privatizations, namely the main power utility PPC’s disinvestment of lignite units and the progress of gas utility DEPA’s sale; market liberalization and correction measures, such as the target model and NOME auctions; as well as the progress of RES auctions for new renewable energy facility installations.

In an unexpected development, the technocrats have also turned their attention to the delayed National Energy and Climate Plan until 2030. The plan has been criticized by various local market officials, including PPC, for possessing numerous contradictions, gaps and ambiguities.

Next week’s post-bailout meetings between Greek officials and lender representatives will play a crucial role in the preparation of a new progress report to be published next month.

 

Meliti, Megalopoli worker exodus at 360, Brussels grants extension

Posted on by admin

Main power utility PPC staff employed at the corporation’s Meliti and Megalopoli power stations, both loss-incurring, appear to be embracing a voluntary exit plan offered by the company as part of an effort to entice investors to its bailout-required disinvestment of lignite units. Outgoing workers presumably fear the job insecurity that lies ahead at the utility, now undergoing transformation.

A total of 360 workers at the Meliti and Megalopoli lignite-fired power stations have so far registered for the voluntary exit plan, offering severance pay of up to 25,000 euros, including bonuses, energypress sources informed. Officials believe the exodus tally could rise further.

Investors have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248, to be cut down to 600. However, even such a reduction cannot guarantee sufficient investor interest as possible buyers want more incentives that would  compensate for these loss-incurring units.

At present, 1,017 workers are employed at the Megalopoli unit and 231 at Meliti. Investors want 480 workers to remain at Megalopoli and 120 at Meliti.

According to energy ministry officials, the European Commission has officially granted Greece a deadline extension for the voluntary exit plan that resets the date for February 8 from January 31.

If all goes according to plan, binding offers by prospective buyers will be expected on January 23, while improved offers, if needed, and a PPC announcement of the winning bidder will be due by January 31. Greece, according to the current schedule, needs to officially update the European Commission of the disinvestment’s conclusion by February 8.

Investors not warming to PPC lignite units sale, deadline near

Posted on by admin

Prospective buyers are maintaining an unfavorable outlook of the main power utility PPC’s bailout-required sale of lignite units with just over a week remaining before the latest deadline for binding bids expires.

PPC and the energy ministry will need to make further improvements to the disinvestment’s sale and purchase agreement (SPA) terms, sources stressed.

SPA revisions made in the lead-up to the sale’s deadline, now expiring on January 23, including a commitment for CAT remuneration of 40,000 euros per MW or up to 30 percent of the sale price, as well as a voluntary exit plan for workers at the loss-incurring Meliti and Megalopoli power stations included in the sale do not appear sufficient to generate genuine buyer interest.

Uncertainty continues to surround the outcome of state-controlled PPC’s voluntary exit plan as the date for binding bids draws nearer. Investors believe the workforce at the Meliti and Megalopoli power stations, currently totaling 1,248, needs to be cut down to 600. However, little time remains for an exodus of such magnitude.

Also, an existing agreement concerning lignite supply from the Ahlada mine to the Meliti facility has not been embraced by investors as its price and quantity terms appear vague.

In addition, a profit-and-loss sharing arrangement proposed by PPC for the units has not been been included in the SPA.

Small offering for next NOME auction prompts reaction

Posted on by admin

Electricity market players, especially vertically integrated companies, have raised objections to a subdued electricity amount of 240 MWh/h decided on by RAE, the Regulatory Authority for Energy, for the year’s first NOME auction, scheduled for January 23, as well as the failure, so far, by authorities to decide on export restrictions concerning electricity amounts acquired at these auctions.

The complaints were expressed in a letter forwarded by ESAI/HAIPP (Hellenic Association of Independent Power Producers) to RAE, energypress has been informed.

RAE plans to reserve bigger electricity amounts for later in the year, including 604 MWh/h for the year’s final NOME auction, expected in October. The authority is obviously holding back as it awaits the outcome of the main power utility PPC’s bailout-required sale of lignite units, now in progress.

Independent electricity suppliers fear the small quantity decided on for the year’s opening session, combined with Greece’s elevated System Marginal Price (SMP) and higher wholesale electricity prices in Europe, will intensify bidding competition and prompt further NOME price hikes on January 23.

NOME auctions were introduced in Greece over two years ago to offer independent players access to PPC’s lower-cost lignite and hydropower sources for more competitive pricing policies.

Though the European Commission has already provided permission for the implementation of NOME-electricity export restrictions, RAE has yet to reach a decision, despite launching a public consultation procedure on the matter prior to the previous session late last year.

RAE has divided 1,444 MWh/h into four NOME auctions for 2019. The amount represents 22 percent of the country’s total electricity consumption, as stipulated in the bailout agreement, plus 171 MWh/h, the remainder of a penalty addition prompted by PPC’s failure to reach a market share contraction target set for the first half of 2018.

If all goes well with PPC’s sale of the Megolopoli and Meliti power stations included in its bailout-required investment of lignite assets, then the NOME amount will be reduced to represent 13 percent of Greece’s total electricity consumption.

PPC was well over a 62.24 percent market share contraction target set for the end of 2018 and needs to reduce its share to 49.24 percent by the end of this year.

 

Greece moving closer to sales of ELPE and DEPA, minister asserts

Posted on by admin

Greece has crossed a key hurdle to the sale of a controlling stake in ELPE (Hellenic Petroleum) as it rushes to meet its privatization pledge after emerging from its third and final bailout.

In a Bloomberg interview, energy minister Giorgos Stathakis said Greece has reached an accord with potential buyers of the ELPE stake – valued at the current market price of 1.16 billion euros and seen as a flagship privatization – over the control of its wholly owned unit, ELPE Upstream. Under the accord, the state will own 50.1 percent of ELPE Upstream, which holds Hellenic Petroleum’s hydrocarbon exploration and concession rights.

“Talks with the potential buyers of the 50.1 percent stake in Hellenic Petroleum over Elpe Upstream have finished and all issues have been resolved,” Stathakis said in the interview in Athens.

The push to see the sale through comes after Greece, in August, ended its final international bailout following its decade-long financial crisis. Privatizations, a cornerstone of the bailout program’s rebound plan, haven’t been popular with the leftist government of Prime Minister Alexis Tsipras. Once famous for dragging its feet, the government is now interested in “stepping up the privatization drive,” Grigoris Stergioulis, chairman of Enterprise Greece, the nation’s trade and investment promotion agency, said in August.

Assets in addition to Hellenic Petroleum being prepared for sale include parts of DEPA, Greece’s natural gas supplier, and plants owned by PPC, the country’s state-controlled and largest electricity provider.

Binding offers

Greece’s state-asset sale fund qualified in July two investors for the controlling stake in Hellenic Petroleum – Glencore Energy UK Ltd and Vitol Holding BV – allowing them to continue with the process. The stake is being sold by Paneuropean Oil & Industrial Holdings SA and the Hellenic Republic Asset Development Fund, the refiner’s first and second-largest shareholders.

“While some details remain for the shareholders’ agreement, we expect binding offers on Jan. 28,” Stathakis said. The two companies have concluded their separate ventures for making bids, he said.

On DEPA, Greece is preparing a draft law to split the natural gas supplier into two parts to pave the way for the sale of the company, Stathakis said. The law to create DEPA Infrastructure and DEPA Commercial will be presented to parliament by the end of January, he said.

US foray

Greece will sell the majority of DEPA Commercial, retaining a 15 percent stake. DEPA Infrastructure will comprise the country’s gas network and international projects, including major investments in pipelines, and this part will remain under state control. Greece will invite investors to show interest in the sale during the first half. The state currently controls a 65 percent stake in DEPA while Hellenic Petroleum owns the remaining 35 percent.

DEPA’s purchase in December of the first cargo from Cheniere Energy Inc.’s Corpus Christi liquefied natural gas export terminal, the newest such outlet in the US, opens the way for the regular supply of US LNG to Greece, the minister said.

“Discussions have begun concerning amounts and price and the outcome is a matter of months,” Stathakis said.

Meanwhile, PPC has approved an agreement for investors to buy its lignite coal-fired plants in Meliti and Megalopoli, Stathakis said. The sale is part of an effort to meet the demands of Greece’s creditors for the company to reduce its dominance in the country’s electricity market. Binding offers are due shortly, Stathakis said. (Bloomberg)

PPC unit candidates demanding major changes to SPA terms

Posted on by admin

Possible buyers of lignite units offered by the main power utility PPC in a bailout-required disinvestment have warned that incentives offered so far do not suffice to prevent losses incurred by two power stations, Meliti and Megalopoli, included in the sale, and, as a result, are demanding major changes to the sales and purchase agreement (SPA) terms.

The sale procedure’s binding bids deadline has been given a further extension until January 23, but, despite the additional preparation time, investors are warning structural problems at the units will make it difficult for them to participate in the sale.

Certain pundits suggest the negative talk could be part of a bargaining game played by investors aiming for the best possible terms and deals.

The need for a workforce reduction at the two power stations, down to a total of 600 from the current 1,248, is one of the main demands of investors, who believe half the current workforce would be enough to keep these units running.

PPC has offered employees a voluntary exit plan offering 15,000 euros in severance pay plus a 5,000-euro bonus. However, buyers want the ongoing procedure completed before they submit any binding bids.

Prospective buyers have determined the Meliti and Megalopoli are incurring losses of between 60 and 70 million euros per year. A subsequent profit-and-loss sharing scheme offered by PPC as remedy was included in the SPA terms but ended up not being accepted by Brussels, the energy ministry has informed.

 

 

High failure risk for PPC lignite units sale without extension

Posted on by admin

Possible buyers of lignite units being sold by the main power utility PPC through a bailout-required disinvestment may keep offers subdued at extremely low levels or refuse to make any offers at all if the current deadline for binding bids, set for January 7, is not extended, investors considering the sale have indicated.

They are troubled by the ongoing ambiguity of a series of sale and purchase agreement (SPA) terms included in the disinvestment as incentives – including a voluntary exit plan for employees at two lignite-fired power stations, Meliti and Megalopoli, and the CAT remuneration level for these – and, as a result, cannot yet factor these into their calculations.

The energy ministry and PPC are both well aware of the sale effort’s current risk of failure but the ministry – officially, at least – continues to expect binding offers three days from now.

The CAT remuneration level for the sale package’s power stations has been estimated at 40,000 euros per MW but the European Commission has yet to offer its official approval.

The energy ministry is treading carefully to avoid any blame on Greece for delays in PPC’s disinvestment procedure, one of the country’s main post-bailout commitments.

At this stage, two scenarios appear possible. The sale’s authorities could offer a sizable deadline extension, until March, for example, and ensure clarity for investors, or the sale can proceed as is under a high risk of failure.

 

PPC’s voluntary exit plan terms still not ready, lignite units sale deadline near

Posted on by admin

The eligibility terms and conditions for the main power utilty PPC’s voluntary exit plan concerning 1,248 employees at two power stations included in a bailout-required sale of lignite units have yet to be prepared despite being a crucial factor in the disinvestment effort’s outcome.

PPC has announced that employees interested in taking up the voluntary exit offer need to submit applications by January 10 but has yet to offer eligibility details.

This delay is injecting credibility into rumors of a deadline extension for binding bids by prospective buyers of PPC’s lignite units. They face a January 7 deadline.

Prospective buyers want to know the outcome of the voluntary exit plan before they submit binding bids.

Despite the time squeeze, energy ministry officials insist the  disinvestment’s schedule will remain as announced. If so, binding bids will need to be submitted on January 7, improved offers, if required, must be submitted on January 10, and evaluations of offers will be made a day later.

Investors have not been given any other schedule dates for the sale, iit is believed.

A total of 1,017 staff members are employed at PPC’s lignite-fired Megalopoli power station and 231 at Meliti, the two facilities for which the voluntary exit plan applies.

Investors want the combined workforce total of 1,248 at the two units reduced to 600 workers, meaning 120 could remain at Meliti and 480 at Megalopoli. Union groups believe such a drastic staff cut will be difficult to achieve.

The voluntary exit plan, which also applies for employees who have yet to gain pension rights, offers 15,000 euros in severance pay plus a 5,000 euro bonus for every outgoing staff member.

 

 

PPC’s lignite units sale to determine NOME auction amounts in 2019

Posted on by admin

The outcome of the main power utility PPC’s bailout-required sale of lignite units, representing 40 percent of its overall lignite capacity, is expected to determine the electricity amounts to be offered to independent suppliers through the country’s NOME auctions in 2019.

The electricity amount to be offered at NOME auctions, introduced in Greece over two years ago to offer independent players access to PPC’s lower-cost lignite and hydropower sources, is planned to be reduced from 22 percent of overall supply to 13 percent once the sales of PPC’s Megalopoli and Meliti lignite-fired power stations have been completed, according to a bailout agreement term.

A penalty term – requiring extra electricity amounts at the NOME auctions – imposed by the country’s lenders in the event that PPC falls short of its market share contraction targets will be abolished once shareholder purchase agreements for Megalopoli and Meliti have been signed with the prospective buyers.

Authorities have already decide to halve the quantity of this penalty but it remains to be seen if this initiative will be followed through as a result of a new deadline extension been rumored for binding bids in the Megalopoli and Meliti unit sales.

PPC faced a retail electricity market share contraction target of 62.24 percent by the end of 2018, which it missed by a great margin, while the target for the end of 2019 has been set at 49.24 percent.

The first NOME auction for 2019 has been scheduled for mid-January but the session could be deferred until more clarity has been achieved on matters concerning the lignite unit sales.

A 171 MWh/h penalty amount – left over from last year – will need to be added to the electricity amount RAE (Regulatory Authority for Energy) will decide to offer suppliers at the year’s first NOME auction.

Meanwhile, RAE has yet to announce its decisions on export limit measures to be set for electricity amounts acquired at the NOME auctions.

 

 

Lease for lignite mine feeding Meliti unit extended until 2028

Posted on by admin

The energy ministry has offered potential buyers of PPC’s bailout-required sale of lignite units an additional incentive by extending the lease of a state-owned lignite mine in the Ahlada region supplying the sale package’s Meliti power station until 2023 with an option for a further extension until 2028.

These five and ten-year extensions, offered to Lignitorihia Ahladas, the firm utilizing the mines, have been included in a ministerial decision signed by energy minister Giorgos Stathakis on the eve of Christmas.

According to the decision, Lignitorihia Ahladas will need to maintain its lignite production at a level of at least 2 million tons per year, unless unfavorable conditions for which the firm is not responsible end up prevailing and stifling output.

The lignite deposit at the Ahlada mine has been estimated at 32 million tons, according to a technical and financial report submitted by Lignitorihia Ahladas to the energy ministry last May, when the firm requested an extension of its contractual arrangement concerning the mine.

 

 

 

 

 

PPC lignite units sale headed for new deadline extension

Posted on by admin

The main power utility PPC’s bailout-required sale of lignite units, representing 40 percent of its overall lignite capacity, is headed for yet another deadline extension beyond the current January 7 date for binding bids, energypress sources have informed following a meeting between the power utility’s chief executive Manolis Panagiotakis and Genop union leaders, staged on the eve of Christmas.

At this stage, January 25 appears to be the likeliest new date for binding bids.

Prospective buyers want all procedures for a voluntary exit plan concerning 1,248 employees at the Megalopoli and Meliti power stations, both incurring losses, to be  completed before they submit any binding bids. According to energypress sources, a January 10 deadline has been set for the voluntary exit plan.

PPC included the voluntary exit plan to the disinvestment’s sales and purchase agreement (SPA) terms as an incentive.

Losses incurred at the Megalopoli and Meliti power stations and the unfavorable overall conditions concerning lignite as an energy source are two factors believed to be keeping investor offer plans at subdued levels.

A total of 1,017 staff members are employed at the Megalopoli facilities and 231 at Meliti. Investors have called for a reduction of 600 workers at both units. This means the Meliti power station would be left with 120 workers and Megalopoli with 480. Unionists are questioning whether such a target is attainable.

Employees accepting the voluntary exit plan stand to receive severance pay of 15,000 euros and a bonus amount worth 5,000 euros.

Other key incentives offered to investors in the SPA include Brussels-endorsed CAT remuneration of between 35,000 and 40,000 euros per MW for lignite-fired power production over a six-year period; a steady lignite supply price by PPC for the Meliti power station until a dispute concerning the nearby lignite mines in Florina is resolved; and the elimination of a lignite surcharge, already ratified in parliament and factored into investor equations.

 

Voluntary exit offer a final pitch in PPC lignite units sale effort

Posted on by admin

The main power utilty PPC has included a voluntary exit plan for 1,248 employees stationed at the loss-incurring Megalopoli and Meliti power stations into the sales and purchase agreement (SPA) terms of its bailout-required sale of lignite units in what appears to be a final pitch to convince hesitant investors.

The labor flexibility term is one of four key incentives included in the SPA by the power utility, appearing eager for a successful sale procedure, representing 40 percent of its overall lignite capacity, to avoid repercussions, notably the addition of hydropower units to its bailout-required sale list.

In comments yesterday, PPC’s chief executive Manolis Panagiotakis argued the losses being incurred at the utility’s Megalopoli and Meliti power stations are less than figures being reported. He contended quarterly losses are 4.5 million euros at the Meliti unit and 3 million euros at Megalopoli.

Employees accepting the voluntary exit plan stand to receive severance pay of 15,000 euros and a bonus amount worth 5,000 euros.

A total of 1,017 staff members are employed at the Megalopoli facilities and 231 at Meliti. In the case of Megalopoli, employing a far greater number of persons, the voluntary exit plan will also be available to workers who have yet to accumulate retirement rights.

Investors have called for a reduction of workers at both units to 600 employees in total, which could be difficult to reach as 648 employees would need to accept the voluntary exit offer.

Other key incentives offered to investors in the SPA include Brussels-endorsed CAT remuneration of between 35,000 and 40,000 euros per MW for lignite-fired power production over a six-year period; a steady lignite supply price by PPC for the Meliti power station until a dispute concerning the nearby lignite mines in Florina is resolved; and the eradication of a lignite surcharge, already ratified in parliament and factored into investor equations.

Binding bids by potential buyers are due on January 7.

Buyers presented PPC sale’s make-or-break SPA terms

Posted on by admin

Prospective buyers of main power utility PPC lignite units on offer through a bailout-required disinvestment will be presented a finalized sale and purchase agreement’s (SPA) terms today, seen as a make-or-break step in this sale procedure.

The appraisal by investors of the SPA, featuring four new bonuses as incentives, will determine their level of interest in the sale of power stations and mines representing 40 percent of PPC’s overall lignite capacity, as well as the level of  binding bids they will be prepared to submit on January 7. Officials plan to complete the procedure on January 15.

The SPA includes the elimination of a lignite surcharge, already implemented and factored into calculations by investors.

It also includes a new term, submitted to parliament yesterday as part of a wider package of energy sector adjustments, enabling new owners to reduce personnel at units acquired. Any staff members not needed at these units will be transferred to DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, according to the SPA. All prospective buyers had demanded this labor flexibility term. It is estimated between 300 and 400 employees, the majority from the Megalopoli power station, could end up being transferred.

A third bonus in the SPA entails CAT remuneration eligibility for PPC’s lignite-fired power stations up for sale for a period of at least six years, until 2025, as was announced yesterday by the European Commission.

The fourth incentive ensures investors a steady lignite supply price by PPC for the package’s Meliti power station until a dispute concerning the nearby lignite mines in Florina is resolved.

The energy ministry and PPC believe these four bonus terms will offset operating losses believed to be incurred by the power stations for sale, as was determined by investors.

All possible buyers have continued to remain cagey on their intentions, despite the announcement of the sale’s bonus terms.

 

Energy ministry, DG Comp discussing new incentives for PPC units sale

Posted on by admin

Energy ministry officials and the European Commission’s Directorate-General for Competition are negotiating a new incentive plan for investors considering the main power utility PPC’s sale of its Meliti and Megalopoli power stations, part of a bailout-required disinvestment of lignite units, energypress sources have informed.

The two sides are distancing themselves from a previous Greek proposal offering prospective buyers a profit-and-loss sharing arrangement for the units and focusing on a new incentive model, the sources added.

The Meliti and Megalopoli power stations are loss-incurring, possible buyers have determined through due diligence.

Officials closely monitoring the negotiations informed the new model’s objective is to restrict expenses and increase revenues.

It is believed negotiations could conclude tomorrow, if all goes well, otherwise talks will continue into next week.

PPC is scheduled to stage a board meeting on December 20 to endorse the corporate group’s nine-month results and the sale and purchase agreement (SPA) terms, including incentives.

Binding offers by investors for the Meliti and Megalopoli units are scheduled to be submitted on January 7. If improved bids are requested, these will need to be submitted on January 10. Offers are planned to be appraised by PPC’s board a day later and, on January 15, the energy ministry will inform the European Commission’s Directorate-General for Competition on the disinvestment procedure’s results.

This is the official schedule. It remains to be seen if the plan will be adhered to. All will depend on whether investors will embrace the incentives now being discussed.

 

 

Ministry, discussing PPC lignite sale SPA terms, to seek deadline extension

Posted on by admin

Energy ministry sources are cautiously optimistic negotiations with the European Commission’s Directorate-General for Competition on sale and purchase agreement terms to be signed by the main power utility PPC and potential buyers of its lignite units offered as a bailout-required disinvestment will soon be finalized, possibly within the current week.

The sources added the SPA terms to be established will help make the units sustainable, attractive prospects for buyers.

Barring unexpected developments, the SPA terms should be ready to be approved at a PPC board meeting on December 20.

Greece is expected to request a new deadline extension for an international tender concerning PPC’s disinvestment of lignite units beyond the current December 21 date. However, the additional time to be requested will be less than the period sought by PPC, energy ministry officials informed.

Completion of the tender between January 15 and 21 is feasible, the ministry officials noted. This would require interested parties to submit binding offers in early January followed by the declaration of a preferred bidder several days later.

The European Commission has rejected the inclusion of a Greek SPA term proposal entailing a 50-50 share of profits or losses by PPC and buyers of lignite units for a two-year period, up to a 10 percent limit of a bid’s value. Brussels also disagrees with a Greek proposal calling for PPC’s entitlement to a 30 percent share of remuneration to be received through the CAT mechanism.

Brussels set to launch action against Amynteo overtime use

Posted on by admin

The European Commission is set to launch a sanctions process against Greece in response to the country’s continued use of main power utility PPC’s lignite-fired Amynteo power station, whose 17,500-hour operating time limit, imposed for environmental reasons, expired approximately three weeks ago, on November 19.

The news of the imminent Brussels action was disclosed by a highly-ranked Directorate-General for Environment official in Athens last Friday, who added the specific department, responsible for EU policy on the environment, has not received any Greek extension request.

European Commission sanction procedures for such issues are typically lengthy and could take anywhere between a year or two to complete from the time Brussels forwards its initial complaint, the two sides exchange ensuing letters, Athens raises an anticipated objection, and Brussels issues a ruling, an official who is well-informed on the process told energypress.

Athens will aim to utilize this period and push ahead with a plan to complete an Amynteo power station upgrade that would enable the revamped unit to keep operating. The development of Ptolemaida V, a modern facility, may also be completed by then.

The Amynteo upgrade is not expected to begin until a bailout-required sale of three power stations at Megalopoli and Meliti has been completed.

The Mytilineos group, Gek Terna, Copelouzos, joined by China’s Shenhua, as well as Intrakat, have all expressed interest for involvement in the Amynteo upgrade.

 

 

PPC wants more lignite sale time, procedure prospects grim

Posted on by admin

The main power utility PPC has requested a three-month extension for its bailout-required sale of lignite units as the utility’s failure, to date, to secure any sale terms that would make the assets for sale more attractive to investors threatens to sink the entire effort.

Given this threat, PPC, just days ago, forwarded a letter to the energy ministry and the European Commission’s Directorate-General for Competition requesting a deadline extension for binding offers until mid-February. No signs have yet to emerge as to whether Brussels will offer PPC additional time.

The European Commission has rejected a profit-and-loss sharing arrangement proposed by PPC entailing an even split of lignite unit profits and losses with buyers for a two-year period. Brussels believes this term contravenes Greece’s commitment for state-controlled PPC to disinvest, through the sale, 40 percent of its overall lignite capacity.

Brussels has also delayed endorsing the country’s permanent CAT remuneration plan, which includes remuneration for PPC’s lignite-fired power stations. Their exclusion from Greece’s new CAT mechanism would devastate the government’s disinvestment plan for PPC’s lignite units.

These negative developments, combined with higher international CO2 emission prices and PPC unit operating losses identified by prospective buyers through PPC’s data room, have all raised investor concerns with respect to the lignite units sale.

PPC has warned European Commission insistence on the sale’s completion within December would severely limit, if not vanish, investor interest, while any offers made would be too low for the power utility’s board to accept.

Brussels rejects profit-loss sharing term in PPC units sale

Posted on by admin

The European Commission has rejected a sale and purchase agreement (SPA) term entailing a 50-50 share of profits or losses with buyers of lignite units included in the main power utility PPC’s bailout-required disinvestment of lignite units, noting the arrangement does not comply with Greece’s commitments and European Commission Directorate-General for Competition regulations.

PPC’s board was set to stage an extraordinary meeting yesterday to approve the disinvestment’s SPA terms but needed to cancel the session as a result of the rejection by Brussels of the profit and loss sharing proposal.

The European Commission has now given Greece’s energy ministry a few more days, until November 30, to find a solution. The PPC board was notified of the news in a letter delivered yesterday by energy minister Giorgos Stathakis, who requested the planned session’s postponement until the matter is resolved with the Directorate-General for Competition.

The profit and loss sharing plan, envisaged for a six-year period following the sale of lignite units, was incorporated into the sale package as an incentive for higher prices by bidders.

PPC to approve lignite unit SPAs after months of talks

Posted on by admin

The main power utility PPC’s board will stage an extraordinary meeting today to approve terms of sale and purchase agreements (SPAs) negotiated over the past few months with prospective buyers of bailout-required PPC lignite units, appoint a committee for the sale procedure, and also endorse an evaluation process for investor offers.

In the lead-up, a number of prospective bidders threatened to withdraw their interest from the PPC lignite units sale if certain terms were not ensured in the SPAs.

PPC chief executive Manolis Panagiotakis has, to a certain extent, acknowledged the investor uncertainty over the sale procedure, including during an IENE (Institute of Energy for Southeast Europe) conference last week.

One SPA term agreed to by PPC entails a 50-50 share of profits and losses with buyers of lignite units for two years, with an upper limit equivalent to 10 percent of the sale price of power stations intact.

Prospective buyers have also ensured for themselves a term offering protection against PPC fines should European, Greek or any other authorities not offer their approval of purchase agreements.

PPC has also committed to possessing capital amounts of 4 million euros for the Megalopoli lignite unit and 2 million euros for the Meliti unit.

Another SPA term will require buyers of PPC lignite units to not dismiss any personnel for a six-year period following their respective acquisitions. Severance pay factoring in the entire employment period of workers at PPC will be required if this condition in breached.

PPC mulls 50% loss-sharing term to up lignite unit prices

Posted on by admin

The main power utility PPC’s board, seeking to offer incentives that could generate higher sale prices in its bailout-imposed sale of lignite units, is considering a term that would require the corporation to share half of any losses incurred by its Meliti and Megalopoli power stations, both included in a sale package representing 40 percent of the utility’s overall lignite capacity.

The idea, which, if adopted, will be included in the procedure’s sale and purchase (SPA) agreement, is expected to be discussed at an extraordinary meeting of highly-ranked PPC officials on Monday.

PPC would share half the losses for a two-year period following the sale, while an upper limit equivalent to 10 percent of the sale price of power stations would be applied, according to sources. Supposing a power station is sold for 300 million euros, PPC would be liable for shouldering up to 30 million euros of losses.

The Greek power utility’s loss-sharing offer is below a 70-30 arrangement requested by prospective buyers. However, it does illustrate an understanding, by PPC, that investors will not be willing to dig too deep into their pockets for the acquisition of lignite units given the EU’s strict decarbonization policy, making such investments less attractive prospects.

 

Prospective PPC lignite unit buyers still waiting for delayed SPA plan

Posted on by admin

The main power utility PPC’s bailout-required disinvestment of lignite units and mines could fall further behind schedule as a result of the power utility’s delay in presenting prospective bidders a Sales and Purchase Agreement (SPA) plan.

Last week, PPC promised it would imminently present a revised SPA plan based on observations made by potential buyers during the sale procedure’s initial stage.

However, the power utility has yet to deliver, suggesting the sale procedure has been set back by a new delay which, according to some pundits, could prompt PPC to request a further deadline extension for binding bids, currently set for December.

The government’s sale plan for state-controlled PPC’s lignite units is greatly dependent on  European Commission approval of CAT remuneration eligibility – through Greece’s prospective new mechanism – for the units up for sale, as was admitted by the power utility’s chief executive Manolis Panagiotakis in Greek parliament just days ago.

CAT remuneration qualification for the Meliti and Megalopoli power stations included in PPC’s sale package is expected to ensure considerable revenues for their new owners.

Greece’s new CAT plan was discussed in Brussels last week. The European Commission is believed to have demanded certain revisions, including maximum remuneration levels set for respective technologies and auction procedures, as well as details concerning the energy-intensive industrial sector.

PPC to launch retirement offer as part of restructuring effort

Posted on by admin

The main power utility PPC is set to launch a personnel restructuring plan, as part of a business plan prepared by McKinsey consulting firm, beginning with a voluntary retirement offer for 220 employees, expected to be presented at a company board meeting today.

PPC’s retirement offer will be extended to ageing staff members who are eligible for pensions but have opted to carry on working.

Besides severance pay of 15,000 euros for each outgoing employee, the plan is believed to also include a 5,000-euro exodus incentive for staff members who choose to register for the voluntary retirement plan by the end of this year.

Retirement-age employees who neglect the offer will be dismissed and their resulting compensation payments will be restricted to amounts required by Greek labor law, sources noted.

The 220 employees targeted for the voluntary retirement offer stem from PPC’s labor-intensive categories and are over 60 years of age, according to sources. Some workers are over 65 years old, it is believed.

McKinsey’s business plan for PPC recommends expense reductions of 330 million euros to be achieved through the departure of approximately 4,100 employees. The majority of these workers, numbering roughly 3,500, are currently stationed at lignite-fired power stations and mines included in a bailout-required sale package of lignite units representing 40 percent of the utility’s lignite capacity.

Amynteo to run beyond limit for heating purposes until upgrade

Posted on by admin

The government intends to keep operating state-controlled main power utility PPC’s ageing Amynteo power station in the country’s north beyond the slim remainder of a 17,500-hour time limit imposed by the European Commission, now down to six days, to keep covering local telethermal needs until an environmental upgrade of the unit is completed for its full-scale relaunch.

According to initial estimates, the Amynteo upgrade effort could take over a year to complete once the Brussels time limit on the power station expires on November 19.

A process for decisions on the Amynteo upgrade plan’s optimal course is not expected to begin until the completion of PPC’s ongoing bailout-required sale of other lignite units, including three lignite-fired power stations in Megalopoli and Meliti.

The possibility of rival power producers filing complaints or charges against PPC – during the revamp period – for keeping Amynteo running beyond the Brussels-imposed time limit cannot be ruled out.

The government is taking a chance on the issue as, otherwise, locals in the Ptolemaida, Amynteo and Filotas would be left without a general heating system this coming winter.

A public consultation procedure on the use of lignite in the national energy plan until 2030 begins today.

Brussels reserved over PPC lignite unit sale prospects

Posted on by admin

The European Commission appears subdued in its expectations of a successful sale of main power utility PPC lignite units, as required by the bailout, judging by the comments of a highly-ranked Brussels official.

“If the sale fails, we will first analyze why it did not succeed also what needs to be done for it succeed, and then make decisions,” the official told Greek journalists in Brussels yesterday but stopped short of stating that a sale plan concerning PPC hydropower facilities could again be brought to the fore. “If the current model doesn’t work we will need to see what went wrong,” the official added.

When asked if Brussels is troubled by state-controlled PPC’s financial standing, the official made note of recent favorable developments for the power utility as a result of government decisions ending a electricity supplier surcharge and lignite tax. An effort is being made to restructure PPC, as long as the corporation, itself, wants to be helped, the official pointed out.

Greek energy minister Giorgos Stathakis has noted binding offers for PPC’s lignite units, representing 40 percent of its lignite capacity, will be submitted by December 15, but admitted the bailout-required disinvestment would enter uncharted territory if the current procedure fails to deliver results.