Power utility PPC’s long-running saga concerning the privatization of a 17 percent stake has ended following a legislative amendment submitted by the finance ministry to facilitate the process.
The step was supposed to have been taken in 2012, during the country’s first bailout agreement. The then-government ran out of time and ended up transferring the 17 percent stake to privatization fund TAIPED in 2014.
Two years later, in 2016, EESYP, the super privatization fund, was established, to which the Greek State transferred the other 34 percent stake it held in PPC.
From that period onwards, a variety of scenarios concerning the sale of PPC’s 17 percent came and went, covering the entire period of Greek bailouts.
In the post-bailout era, the current government wanted PPC, following its financial restructuring, to play a leading role in the energy transition. As a result, last autumn, a decision was made to proceed with an equity capital raise at PPC that would result in a total stake reduction to 34 percent for the two privatization funds, TAIPED and EESYP.
The recent equity capital raise resulted in EESYP, the super privatization fund, having a PPC stake of 23.8 percent stake, down from 34 percent, and TAIPED, the other privatization fund, having a 10.32 percent stake, down from 17 percent.
The still-dominant yet deeply troubled main power utility PPC, burdened by an alarming unpaid receivables problem as well as bailout-required market share contraction targets and lignite unit sales, will face yet another challenge over the next few months when its board is subject to the appraisal of the country’s Public Holding Company (EDIS), to serve as a subsidiary of Greece’s new privatization superfund (EESYP) expected to be established by the end of the year.
A total of 15 state utilities, including 34 percent of PPC held by the Greek State, will be transferred to the EDIS fund, whose role will be to seek ways of improving utility performances as an effort to prevent their privatizations.
The Greek State’s other 17 percent of PPC is already controlled by TAIPED, the existing state privatization fund being incorporated into the overall structure of the new superfund.
Once established, the EDIS fund’s first task will be to appraise the administrations of all utilities under its control and appoint new administrations wherever it deems changes are necessary. These evaluations are expected to be strict.
Ourania Ekaterinari, manager of EEDYP, the new privatization superfund, is well acquainted with PPC as she served as the utility’s deputy chief between 2010 and 2015.
The boards of all utilities, including that of PPC, will be judged based on their results to date and scope of future challenges, which are enormous at the power utility.
The EDIS fund’s appraisals of utility boards will coincide with PPC’s bailout-required sale of lignite facilities, constituting 40 percent of total capacity.
PPC’s unpaid receivables figure stands at 2.5 billion euros while first-half performance figures were poor. PPC posted a first-half net profit drop of 74.8 percent, down to 14.4 million euros from 57.1 million euros in the equivalent period last year.