DEDDIE sale preliminary deadline near, China’s SGCC out of contention

Prominent US funds such as Blackrock and KKR, European funds, including Ardian, as well as distribution network operators, primarily from Europe’s south, and central Europe, are among 19 likely participants, to date, in power utility PPC’s sale of a 49 percent stake in subsidiary DEDDIE/HEDNO, the distribution network operator.

An approaching expression-of-interest deadline set by PPC expires on January 29. In the lead-up, some 70 possible investors have been approached by three consultants, Goldman Sachs, Eurobank and Grant Thornton, commissioned by the power utility for the DEDDIE/HEDNO sale.

State Grid Corporation of China (SGCC) cannot take part in the sale as its strategic partnership with Greek power grid operator IPTO, in which the Chinese company holds a 24 percent stake, would represent a breach of conflicting-interest rules.

SGCC recently made clear an interest to further develop its presence in the Greek electricity market by either increasing its IPTO stake or pursuing a share in DEDDIE.

IPTO awaiting approval of 20% Ariadne sale for €40m minimum

Power grid operator IPTO’s needed approval from RAE, the Regulatory Authority for Energy, of its sale plan offering a 20 percent stake in subsidiary firm Ariadne Interconnection, tasked with the development of the Crete-Athens grid interconnection, is now in the hands of the authority, sources informed.

A condition setting a minimum sale price of 40 million euros, or 20 percent of the nominal value of Ariadne’s equity capital, totaling 200 million euros, has been included in the plan, the sources added.

It also includes criteria that will need to be met by prospective bidders, as well as the tender’s steps all the way to the final round, when qualifiers will be given access to the sale’s video data room.

The VDR will offer candidates financial, technical and legal details concerning the Crete-Athens grid interconnection, a project budgeted at one billion euros and slated for completion within 2023.

IPTO has already secured a 400 million-euro loan from Eurobank, an additional 200 million euros will stem from own capital, while the other 40 percent is expected to be provided in the form of EU subsidies, now close to approval.

China’s SGCC, IPTO’s strategic partner with a 24 percent stake, as well as European operators, among them Italy’s Terna and Belgium’s Elia, have all expressed interest ahead of the Ariadne Interconnection tender.

Importantly, IPTO is still awaiting RAE’s approval of WACC levels for the Cretan interconnection project – permitted revenue (2018-2021) and required revenue (2019-2021).

Projects categorized as projects of major significance are legally entitled to additional returns beyond the asset-based yield.

PPC secures financial relief, cash injections worth €300m

Power utility PPC is reinforcing its financial position for protection against challenges already brought about by the coronavirus crisis and ones not yet fully apparent.

The corporation’s board has approved moves worth 300 million euros, including restructuring of high-cost loans, in an effort to boost its liquidity.

Financial tools and alternative borrowing sources have once again become available to the corporation following its return to profit territory and growth prospects.

Investors and banks are expressing renewed faith in PPC, as was made clear yesterday by three decisions taken by the utility’s board promising to inject about 300 million euros into the company.

CEO Giorgos Stassis and his board approved a JP Morgan offer worth between 200 and 250 million euros for unpaid receivables by customers in the low and mid-voltage categories. This package of unpaid receivables totals 260 million euros and concerns amounts overdue for no more than 60 days. The financial services company is offering an interest rate of 3.5 percent over a three-year period. Bonds will be issued by PPC through an SPV.

Also, the country’s four main banks, National, Alpha, Eurobank and Piraeus, have accepted a request by PPC for a delay in the payments of two 25 million-euro installments, respectively due June 30 and December 31, for a one billion-euro, five-year bond issued in 2018. The systemic banks, showing faith in PPC, agreed to receive these payments when the bond matures in 2023.

In addition, PPC has further diversified its borrowing sources. The board approved an Optima Bank proposal for a 15 million-euro debenture loan with floating six-month interest.

 

Norton Rose Fulbright advises on local RES market’s largest refinancing

Global law firm Norton Rose Fulbright has advised Eurobank Ergasias and Alpha Bank on the €202 million non-recourse refinancing of a renewable energy projects portfolio operated by three subsidiaries of Total Eren, in Greece, it has announced in a statement.

The portfolio consists of five wind parks and seven solar photovoltaic parks with a total installed capacity of 162.4 MW, the company statement noted. This is the largest refinancing in the Greek renewable energy market, it added.

The multi-jurisdictional Norton Rose Fulbright team was led by Athens-based partner and head of the Greek energy practice, Dimitris Assimakis, with assistance from of counsel Dimitris Rampos, senior associates Minas Kitsilis and George Palogos and associates Christina Korinthios, George Asimakopoulos and Sylvia Betrosian.  The team also included lawyers from the firm’s Luxembourg, Paris and London offices, including Luxembourg-based partner Stéphane Braun and of counsel Cyril d’Herbes, Paris-based partner Anne Lapierre, of counsel Eran Chvika and London-based partner Daniel Franks.

Dimitris Assimakis commented: “We are delighted to have advised Eurobank Ergasias and Alpha Bank on the largest refinancing ever in the Greek renewable energy market. This transaction illustrates both banks’ strong commitment to the renewables sector, Total Eren’s market-leading position, along with the improving conditions of the banking sector and overall economy in Greece.”