PPC secures loan refinancing deal for €1.5bn remainder at 5.5%

PPC has secured a loan refinancing agreement for the remainder of a 2.2 billion-euro loan extended by a consortium comprised of the country’s main banks, following approval of the debt obligation’s new terms by the credit committees of all banks involved.

PPC shareholders are expected to be officially informed of the refinancing agreement today through the Athens Stock Exchange.

According to sources, the refinancing terms will apply to a 1.475 billion-euro amount, the outstanding sum of an original 2.2 billion-euro loan extended to PPC. The power utility has been offered a 5.5 percent interest rate, down from the initial rate of 6.5 percent, the sources added.

PPC officials have expressed particular satisfaction over the loan’s adjusted terms following the power utility’s agreement with its lenders, a five-bank consortium.

PPC’s chief executive Manolis Panagiotakis recently told a general shareholders’ meeting that extended negotiations and numerous meetings were needed to achieve the loan refinancing arrangement, primarily because of the substantial amount involved and the coordination needs of the five banks.

According to the PPC boss, the power utility is preparing to seek new funds from the credit market but will not make any moves until the power utility’s creditworthiness is upgraded and collections of consumer unpaid receivables have improved.


Creditor banks expected to set terms for PPC lignite units sale

The main power utility PPC’s creditor banks will consider demanding additional guarantees if the corporation’s bailout-required sale of lignite units is seen endangering its ability to service loans, a source closely following the developments has informed.

This action could be taken early during the process, when the units to be sold are split from the corporation, or later on, towards the end of the international tender, the source added.

PPC’s creditor banks are expected to scrutanize the sale’s related draft bill, expected to be submitted to parliament this week, and then start exercising their rights once two utility subsidiaries are established to carry respective lignite unit sale packages representing the country’s north and south.

Last year, when IPTO, the power grid operator, split from parent company PPC, the banks had set additional terms for a joint 200 million-euro loan. Terms included a demand for a share of future revenues.

As part of their monitoring effort of PPC, Greece’s main banks and the European Investment Bank (EIB) will be informed of a new business plan currently being prepared for the power utility by international consulting firm McKinsey.

This business plan will need to be adjusted to strategic demands required by Greece’s new super privatization fund. PPC’s chief executive Manolis Panagiotakis has been informed of these demands.

In 2019, PPC will need to cover a 1.3 billion-euro loan extended by Greece’s main banks, a 350 million-euro bond payment, as well as a 200 million-euro loan payment to the EIB.