ENEL finalizes sale of ENEL Romania to power utility PPC


Rome, October 25th, 2023 – Enel S.p.A. has finalized its sale to Greek power utility PPC of all the equity stakes held by the Enel Group in Romania, following the fulfillment of all the conditions precedent customary for these kinds of transactions set forth in the related sale agreement, signed on March 9th, 2023. In line with the above agreement, PPC paid a total consideration of approximately 1,240 million euros, equivalent to an enterprise value of around 1,900 million euros (on a 100% basis). An earn-out mechanism is also foreseen concerning a potential further post-closing payment, based on the future value of the retail business.

The overall transaction, excluding the potential earn-out, generated a positive effect on the Group’s consolidated net debt of around 2,080 million euros in 2023, that includes the cash-in of around 200 million euros of extraordinary dividends, which adds to the positive effect of about 85 million euros already generated in 2022.

The transaction also produced a cumulative negative impact for 2022-2023 on reported Group net income amounting to 1,398 million euros, of which 777 million euros in 2023 (including 655 million euros related to the release of the foreign exchange reserve). Conversely, the transaction bears no impact on Group ordinary economic results.

The disposal is in line with the Group’s Strategic Priorities, which envisage the repositioning of Enel on countries where the Group has higher growth potential as well as an integrated presence, namely Italy, Spain, the United States, Brazil, Chile and Colombia.

The Enel Group has been a leading energy player in Romania since 2005, operating in: power distribution with around 3.1 million customers in three key areas of the country, namely Muntenia Sud (including Bucharest), Banat and Dobrogea; supply, providing electricity, natural gas and value-added services; renewable energy, with around 600 MW of capacity; and advanced energy services, such as home services, distributed generation, energy efficiency and electric mobility.

IPTO eyeing North Macedonian operator, a Balkan gateway

Greek power grid operator IPTO is eyeing the Balkan market to reinforce its standing, and, in this context, endeavoring to acquire a stake in MEPSO, North Macedonia’s operator.

If an agreement does go ahead, a prospect that requires the active involvement of the Greek government, then the neighboring country could serve as a gateway for IPTO’s entry into the wider western Balkan region, to take on network upgrade and interconnection projects, definitely needed.

IPTO has already submitted an offer for a stake in MEPSO, either through a strategic agreement or a share capital increase, North Macedonian sources informed.

IPTO executives have, for quite some time now, been engaged in talks with North Macedonian government officials, MEPSO and the country’s regulatory authority covering energy for a stake in the operator, the sources added.

Besides strengthening IPTO’s standing, such a move – which would complement Greek power utility PPC’s takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania – promises to also bolster Greece’s geopolitical role in the Balkan region.

MEPSO also stands to benefit from an agreement with IPTO as the North Macedonian operator could make the most of the Greek operator’s stronger credit rating and gain access to EU funds for network upgrades.

 

PPC new business plan, worth over €9bn, unveiled November

Power utility PPC plans to unveil its new and revised business plan, covering 2023 to 2027, at its capital markets day, scheduled for November, following the completion of the energy group’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania.

PPC’s new business plan is expected to include investments that exceed the existing 2022-to-2026 plan’s 9 billion-euro sum. The precise figure is expected to be decided on by PPC’s administration in October, once all details of the company’s takeover of ENEL Romania have been completed.

The main focus of PPC’s new business plan will be on renewables and the retail electricity market. PPC has made clear its interest to acquire a company with an extensive retail presence. Appliance retail chain Kotsovolos, a member of the Currys group, is one possibility. Kotsovolos is represented by 93 outlets around Greece.

PPC officials met recently with members of the Romanian government to discuss the ENEL Romania takeover’s completion, expected by the end of September.

The power utility is determined to include this addition in its updated business plan as the move promises to boost the company’s financial figures and facilitate new goals for the Greek and, primarily, Balkan markets.

According to sources, PPC’s five-year business plan from 2023 to 2027 will exceed 1.9 billion euros per year.

PPC chief to take part in Romanian Three Seas meeting

Greece aims to bolster its geopolitical influence in the Balkans through energy, power utility PPC’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania being a key part of this strategy.

In addition to PPC’s takeover of ENEL Romania, Helleniq Energy recently invested in Romania and had been preceded by Mytilineos – both in renewable energy projects.

PPC’s ENEL Romania takeover has prompted an announcement from Romanian president Klaus Iohannis, who named Greece as a new member of The Three Seas, a diplomatic initiative taken by Romania’s political leadership to bring together EU member states and candidates located between the Baltic, Adriatic and Black Seas for collaboration in the fields of energy, infrastructure and the digital economy.

Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Slovakia, Slovenia, and Ukraine are the other members of The Three Seas initiative.

Iohannis, Romania’s president, will host a two-day meeting in Bucharest on September 6 and 7 for talks on collaboration in these domains. Ministers and entrepreneurs representing the aforementioned countries, including PPC’s chief executive officer Giorgos Stassis, energypress sources have informed, will take part at the upcoming Bucharest meeting.

Romania has become a geopolitical focal point as a result of the country’s close proximity to war-entangled Ukraine. In addition, Bucharest has established a pivotal role as a result of its support of Ukraine in the war with Russia and Moldova’s EU membership quest. Romania has also facilitated the movement of grain across its borders.

PPC takeover of ENEL Romania to be completed by September

Power utility PPC’s takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania will be completed by September, PPC’s chief executive officer Giorgos Stassis informed analysts during a conference call yesterday, held to present the power company’s first-half results.

As soon as the takeover is completed, PPC will stage a Capital Markets Day to update investors on its updated strategic plan.

New targets can be anticipated as PPC’s business plan will include an injection of new data linked to the ENEL Romania takeover, substantially increasing PPC’s financial performance.

The turnout for yesterday’s conference call was extensive, highlighting the market’s interest in PPC’s progress.

Stassis, the CEO, confirmed PPC’s target for an EBITA figure of 1.2 billion euros in 2023, adding that management will have decided on the distribution of dividends for 2023 at the end of the second half. A percentage of PPC’s profit can be excepted to be distributed in 2024.

Analysts, during the conference call, expressed great interest in PPC’s renewable energy projects. According to data presented by the company’s administration, RES projects either already operating or currently being developed represent a total capacity of 1.6 GW, just over 30 percent of PPC’s 5.1 GW target set for 2026.

Of this total, 228 MW represents new projects in operation, 451 MW represents projects for which contractor procedures are in progress, 100 MW concerns storage systems, 250 MW concerns projects that have secured connection terms, and 640 MW represents RES projects that have met environmental requirements and are now awaiting connection terms.

 

Brussels approves PPC takeover deal for ENEL Romania

The European Commission’s Directorate-General for Competition has approved power utility PPC’s 1.26 billion-euro takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania, sources have informed.

Though it would be possible for all sides involved to compete this acquisition before the end of summer, it will most likely get over the finish line around September as the second round of Greece’s general election, held yesterday, will delay the procedure by a month. The ruling center-right New Democracy party, which held on to power, is reshuffling personnel at ministerial posts.

PPC’s chief executive Giorgos Stassis and his administration are working intensively to update the corporation’s business plan, which could be presented to investors and analysts in October.

The plan will include PPC’s takeover of ENEL Romania as well as other key investment initiatives taken recently by the company such as its development of a CCGT facility in Alexandroupoli, northeastern Greece.

According to sources, PPC will raise its financial goals as a reflection of the company’s growth in size.

PPC is scheduled to hold a general shareholders’ meeting on June 29. The CEO, sources said, could set a date for the corporation’s return to dividend payouts.

 

PPC reaches agreement for €1.26bn buy of ENEL Romania

Power utility PPC and Italy’s ENEL have signed a sale and purchase agreement, following two months of negotiations, for the latter’s sale of its Romanian subsidiary ENEL Romania to the Greek corporation at a price of 1.26 billion euros.

The sale is expected to be completed by September, as long as competition-related authorities approve the agreement.

PPC plans to finance its acquisition of ENEL Romania through a loan of 800 million euros and 460 million euros in company capital.

A move of national importance, PPC’s acquisition of ENEL Romania promises to offer entry into a now-developed Balkan market, establishing the Greek corporation as a strategic market player with access to a significant energy corridor running from Romania and across Bulgaria, all the way to Greece.

Through the deal, PPC will acquire over 130,000 kilometers in electricity distribution networks, double its RES capacity and also gain 3.2 million new customers.

PPC’s ENEL Romania takeover talks at price under local standards

Power utility PPC appears to have reached an advanced stage in its negotiations with Italy’s ENEL for the acquisition of the latter’s Romanian subsidiary ENEL Romania, the various aspects of the deal said to be at price levels well below Greek market standards.

PPC’s offer for ENEL Romania’s retail division, for example, totaling approximately three million customers, results in a price of less than 90 euros per customer, which is less than half than the cost of recent corresponding acquisitions completed in the Greek market.

Mytilineos’ acquisition of Watt+Volt, an energy supplier with a portfolio numbering 200,000 customers, was worth 36 million euros, or 180 euros per customer.

The ENEL Romania deal’s price concerning networks is also being negotiated at a price level well below the cost of corresponding acquisitions recently completed in Greece. The price paid by Australia’s Macquarie for a 49 percent stake in Greek distribution network operator DEDDIE/HEDNO works out to 20 percent over the level being discussed between PPC and ENEL for ENEL Romania’s networks.

The same goes for the Romanian subsidiary’s renewable energy division. For example, Motor Oil acquired ELTECH Anemos for a figure twelve times its EBITDA, whereas the Romanian subsidiary’s RES portfolio is being negotiated at a price level of less than ten times its EBITDA.

PPC is negotiating a full acquisition of ENEL Romania for a takeover promising to expand the Greek utility’s interests in the Balkans, with the region’s fastest-growing economy as a base.

 

PPC takeover of ENEL Romania could be just weeks away

Power utility PPC, currently conducting due diligence for its planned acquisition of Italian energy group ENEL’s Romanian subsidiary ENEL Romania, has completed about 70 percent of the procedure, without issues, and could strike a deal within the next two to four weeks.

If the two sides do reach an agreement, PPC will fully acquire the Italian group’s Romanian subsidiary, a big move facilitating the Greek utility’s plan for expansion into the Balkan energy market with Romania, the region’s fastest growing economy, as a base.

An agreement between PPC and ENEL Romania would offer the former full control of ENEL Romania’s assets, regardless of the subsidiary’s varying stakes in network, supply and RES projects, ranging from 51 to 100 percent. ENEL holds the managerial rights to all its ventures in Romania, also included in the sale.

PPC officials have ruled out any chance of also expressing interest in ENEL’s interests in the Greek market. Asset prices in the Greek market greatly exceed those in Balkan markets, they explained.

An ENEL Romania deal would offer PPC three million customers in Romania as an addition to the company’s five million existing customers in Greece.

It would also offer PPC access to rich natural gas deposits in the Black Sea, while a Romanian venture would be supplied favorably-priced LNG arriving at Greek ports – currently via the Revythoussa islet terminal just off Athens and, in the near future, through a prospective FSRU at Alexandroupoli, northeastern Greece.

Two major energy deals promise to reshape Greek market in 2023

Two major deals expected to be struck early in 2023, barring surprise developments, namely Greek power utility PPC’s acquisition of ENEL Romania and Australian fund First Sentier’s takeover of TERNA Energy, promise to further internationalize the Greek energy market, reshaping it in the years to come through new opportunities and balances.

PPC’s completion of an agreement for ENEL Romania, a potential acquisition said to be worth between 1.3 and 1.4 billion euros, would open up the Balkans for the Greek utility and greatly increase the corporation’s size. ENEL Romania is roughly half the current size of PPC.

PPC and ENEL Romania’s parent company ENEL have signed a confidentiality agreement for exclusive negotiations ahead of due diligence.

As for TERNA Energy, the Australian fund First Sentier is believed to have completed its due diligence in November and reached a takeover agreement worth 2.34 billion euros.

According to sources, the Australian fund is now working on a financing agreement with Greek banks before finalizing the agreement.

If TERNA Energy’s share is sold at 22 euros, then the agreement with First Sentier could exceed 2.5 billion euros.

TERNA Energy’s investment plan for 2022-2029 is valued at 5.9 billion euros and includes additional RES installations of 5.5 GW, from 895 MW at present, the objective being to increase annual EBITDA to more than 700 million euros.

 

PPC takeover of ENEL Romania would establish utility in region

Power utility PPC has entered exclusive talks with Italy’s ENEL for the acquisition of the latter’s portfolio in Romania, a lucrative prospect offering networks in three Romanian regions, three million customers in the country’s retail electricity market, 550 MW in RES projects already operating, as well as 2,000 MW in RES projects at an advanced stage.

Completion of the deal would take PPC to another level and establish it as a regional force in southeast Europe’s energy market.

Market experts have put a price tag of between 1.3 and 1.4 billion euros on the possible deal.

Late last night, PPC and ENEL signed a confidentiality agreement obliging ENEL officials to only discuss a possible deal with PPC, which is conducting due diligence until January 23, in preparation for a deal that appears increasingly likely, as long as the two sides can agree on a price.

ENEL controls Romanian networks in the Muntenia region, surrounding Bucharest, the industrial zone of Timisoara, as well as Dobrota’s tourism section. The three networks offer a total capacity of 16 TWh.

PPC up against three big funds for Enel Romania acquisition

Power utility PPC is up against strong competition from three major funds handling capital worth hundreds of billions of euros for the acquisition of Enel Romania, a subsidiary of the major Italian energy group Enel, sources have informed.

Enel Romania has been placed for sale as its parent company wants to reduce its net debt figure.

PPC has been scouring neighboring markets for almost a year now, looking for opportunities to expand beyond Greece and establish a geostrategic position in the region.

The southeast European energy market is attracting major international investment interest as Balkan countries have plenty of potential for RES growth and also promise to serve as a new energy corridor in Europe.

Canadian fund Brookfield, handling over 750 billion euros in capital and globally present with investments in renewables, infrastructure, real estate and social security funds, is believed to be one of the funds PPC is up against for Enel Romania.

The UK’s Amber Infrastructure, handling over 10 billion euros in capital, primarily in infrastructure, has been named as another potential buyer of Enel Romania.

Enel’s debt figure surged to 70 billion euros in September following energy crisis measures taken by the Italian government, an extraordinary tax, and increased natural gas orders for coverage of customer needs.

Enel aims to cut its debt by roughly 21 billion euros through the sale of assets in countries such as Romania, Argentina and Peru.