Final mortgage-related details of a prospective 200 million-euro loan being negotiated for quite some time now by the main power utility PPC with the country’s four main banks, an amount needed by the power utility to cover a bond set to mature on May 1, are expected to be finalized today. This development will enable the imminent signing of a loan agreement, possibly within the current week, and the amount’s subsequent release, sources have informed.
It is anticipated that today’s expected agreement will prompt the last of the four banks to endorse the loan. The other three banks have already done so.
The loan agreement between state-controlled PPC and the banks, as well as the amount’s delivery, will both need to be settled no later than the end of next week as the power utility must actually make the bond payment prior to the upcoming May Day public holiday.
The board at PPC has already endorsed the new loan agreement, whose details include an obligation by the utilty to offer the banks control of PPC electricity supply contracts worth as much as the 200 million-euro amount to be borrowed.
According to the agreement, PPC will create a special account into which specific electricity supply payments will be deposited. Also, PPC has agreed to pay 25 million euros of the loan’s 200 million-euro total within the current year. An interest rate of 5.8 percent has been set.
Besides this loan, PPC, troubled by a poor cash flow that has been mainly attributed to an alarming unpaid receivables figure, is looking forward to a series of cash injections in the short term, beginning with a 93 milion-euro capital return from subsidiary IPTO, the power grid operator, for its bailout-required split from the parent company.
PPC is also anticipating a 320 million-euro payment from China’s SGCC (State Grid Corporation of China) for the latter’s agreement to acquire a 24 percent stake of IPTO as well as a still-undetermined payment from the Greek State for its plan to buy a 25 percent stake of IPTO. This amount will be determined through an evaluation process.
PPC must meet the upcoming bond payment if it is to stand any chance of benefeting from a favorable credit rating revision by Standard and Poors. This would help PPC borrow on improved terms in the future.