PPC ’21 operating profit virtually unchanged at €800-850m

Power utility PPC is headed for an operating profit of between 800 and 850 million euros for 2021, marginally below the previous year’s level, despite the impact of the energy crisis on outlays in the third quarter, the corporation’s administration has informed analysts during a presentation of results for the nine-month period.

PPC’s outlays for natural gas, energy and CO2 emission right purchases rose by an overall 629 million euros in the first nine months, to a level 37 percent higher than the total registered for the equivalent period in 2020, PPC officials reported.

Natural gas outlays were up 119.8 percent, reaching 452.7 million euros from 206 million euros.

PPC’s outlays for liquid fuels increased by 14.7 percent in the first nine months to 410.2 million euros, compared to the equivalent period in 2020, as a result of higher prices for mazut (8.9%), diesel (8.4%) and increased generation powered by liquid fuels.

The corporation’s CO2 emission right outlays surpassed all other expenses, reaching 539.4 million euros in the nine-month period of 2021 from 263.1 million euros during the same period a year earlier.

 

PPC set to offer new fixed tariff package, beginning December 3

Power utility PPC is introducing a new fixed-tariff package for consumers, as of December 3, as part of the corporation’s hedging formula to offset risks.

The new package will, as of this coming Friday, offer consumers a fixed tariff of 18 cents per KWh, or 17 cents per KWh for online applications, as well as a 50 percent discount on fixed costs for the first six months if applications are lodged by a December 31 deadline. Tariff levels of rival suppliers currently average 23 cents per KWh.

The packages will be offered as one-year agreements and include household coverage for emergency technical support. The insurance policy incorporated into new agreements will entitle holders up to five visits per year from tradesman such as plumbers and electricians and cover damages up to 100 euros per visit.

 

 

Slight relaxation of lignite withdrawal plan, ’28 a firm date

 

The government’s climate change rules concerning the country’s withdrawal plan for power utility PPC’s lignite-fired power stations appears headed for a slight relaxation by taking into account the difficulties brought about by the energy crisis, leaving 2028 as the only definite deadline for the withdrawal of the utility’s very last lignite facility, Ptolemaida V, a new facility yet to be launched.

A plan for an accelerated withdrawal of all existing lignite-fired power stations by 2023, announced by Prime Minister Kyriakos Mitsotakis at a UN Climate Action Summit in 2019, is now being reassessed and has been put through public consultation running until December 24, the objective being to ensure grid sufficiency in the face of changes.

The withdrawal of lignite-fired power stations, all operated by PPC, is a tricky equation as a swift procedure promising to curtail PPC’s lignite-related losses – these units are currently profitable, an energy crisis abnormality – needs to be balanced with grid sufficiency protection.

PPC’s rise prompts response of rivals over hydropower control

The rising number of customers returning to power utility PPC is triggering a response from rival independent electricity producers and suppliers, some of which, according to sources, are set to raise competition concerns with Greek and EU authorities by noting the utility’s exclusive use of the country’s hydropower facilities puts it in an advantageous position as profit generated from this activity is, to a great extent, being utilized for an aggressive pricing policy, helping win back customers.

This is not the first time PPC’s exclusive use of Greece’s hydropower capacity is being brought to the fore. On the contrary, it has always been on the European Commission’s agenda, especially during the previous decade’s period of Greek bailout negotiations, and was incorporated in related reports.

However, concerns over PPC’s lignite monopoly and how this matter should be tackled, which led to the introduction of NOME auctions, now abolished, followed by a recent agreement for PPC lignite packages to rivals, have taken precedence.

It seems the hydropower matter has now reached the tipping point for PPC’s rivals, facing toughened market conditions shaped by the energy crisis.

A number of independent producers are believed to be set to forward market data to RAE, the Regulatory Authority for Energy, as well as the domestic and European Commission competition authorities, to highlight their disadvantageous positions and call for intervention.

Minister calls meeting on winter energy sufficiency challenge

Energy authorities are expected to focus on the challenge of assuring energy sufficiency over the winter season at a meeting of today, called by energy minister Kostas Skrekas as a result of production capacity concerns at the country’s lignite facilities.

Maintenance level cutbacks at the country’s lignite-fired power facilities, in anticipation of their decarbonization-related withdrawals, may end up affecting the performance of some units, but their contribution to the grid could be crucial as a result of the wider impact of the energy crisis on the market.

The energy minister called today’s meeting in response to a letter forwarded by power utility PPC, controlling the country’s lignite facilities, to power grid operator IPTO, in which current problems faced by lignite-based electricity generation were stressed.

PPC 300% increase in returning customers, outflow still bigger

The number of customers returning to power utility PPC in October increased by more than 300 percent compared to May, but the company is still losing more customers than it is gaining, latest market data obtained by energypress has shown.

PPC gained 5,200 new customers in October, compared to 1,350 five months earlier, the data showed. If the wave of PPC’s returning customers continues to swell, the inflow of customers will eventually exceed the outflow.

Recent data made available by distribution network operator DEDDIE/HEDNO backs this trend as the operator’s figures showed that PPC lost 47,000 low-voltage connections between the second and third quarters, well below the 71,000 lost between the first and second quarters.

PPC represented 5.06 million low-voltage connections in September, a 74.2 percent market share, according to the DEDDIE/HEDNO data.

Among the independent suppliers, representing an overall 1.61 million low-voltage connections in September for a 23.6 percent share, Protergia, a member of the Mytilineos group, was at the forefront with a 4.07 percent share, or 277,000 customers, followed by Elpedison, with 3.75% and 256,000 connections, and Heron with 232,000 connections and a 3.41 percent share.

 

Five power suppliers fined for older debt to market operators

Five electricity suppliers have been handed fines by RAE, the Regulatory Authority for Energy, for outstanding debt to market operators totaling 347 million euros, energypress sources have informed.

The RAE board, which was preoccupied with the matter over at least three sessions, reached its decision at a crucial time amid the energy crisis, challenging the sustainability of energy companies.

Power utility PPC, the market’s dominant supplier, is believed to be among the five suppliers handed fines, along with four smaller players.

The five suppliers have agreed to letters of guarantee representing 50 percent of their debts owed to the operators and installment payment programs for settlement of remaining amounts over periods ranging from 8 to 10 months, sources noted.

RAE is expected to reexamine the progress of these payments in December, 2022.

Despite handing out fines, RAE is believed to be extremely concerned about the sustainability of energy suppliers, especially smaller players.

PPC unable to capitalize on lower-cost lignite production

Power utility PPC has found itself unable to take full advantage of current market conditions making lignite-fired power generation lower in cost compared to natural gas-fueled generation as the utility has winded down on maintenance levels at lignite units in anticipation of their expected full withdrawal by the end of 2023 as part of the country’s decarbonization plan.

The utility’s decreased maintenance of its lignite units has led to technical issues not enabling the facilities to operate at full capacity.

The profit margin for lignite-based generation has increased considerably but PPC is not able to significantly boost production for increased sales of lignite-based electricity generation.

Lignite’s share of the country’s energy mix is currently at single-digit levels, registering a 9 percent share in September, according to a recent monthly report released by power grid operator IPTO.

Electricity consumers unsettled, greatly increased return to PPC

An increased number of electricity consumers are switching suppliers, unsettled by the rising energy prices of recent months, the biggest gainer of this activity being power utility PPC, latest market data made available to energypress has shown.

The number of electricity consumers shifting suppliers increased by 50 percent in September, compared to the level in April. Specifically, 1.5 percent of the country’s electricity consumers changed supplier in September, up from one percent in April, the data showed.

Interestingly, the number of consumers returning to PPC, still the dominant player, more than doubled in September, compared to April. This trend is believed to have gained even further momentum in October.

The government’s role in presenting PPC as a safer, more socially conscious enterprise, as well as the company’s pricing policy, offering fixed tariffs, have been identified as the main factors behind this increased return of customers to PPC, market officials noted.

 

Gas spot market absence ‘key to higher wholesale electricity prices’

Greek gas market peculiarities and the non-existence of a spot market for natural gas were attributed as key reasons behind wholesale electricity market price differences between Greece and markets abroad, local electricity producers told RAE, the Regulatory Authority for Energy, following the authority’s request for explanations.

RAE held talks with representatives of power utility PPC, Mytilineos, Elpedison and Heron on the issue of wholesale electricity price levels.

The Greek gas market operates on a month-ahead model without the possibility for supply through spot markets, all four electricity companies told RAE.

At present, roughly half of the country’s electricity is generated by natural gas-fired power stations.

Electricity suppliers snub RAE’s tariff categorization proposal

Power utility PPC and the country’s independent electricity suppliers have responded negatively to a proposal from RAE, the Regulatory Authority for Energy, calling for the categorization of low-voltage electricity tariffs offered to households into three groups, low, limited and high risk, for fixed, partially restricted and floating tariffs, respectively.

According to the RAE proposal, made in related public consultation, consumers taking on greater risk would be offered lower base tariffs, which, however, would be fully susceptible to market forces and resulting fluctuations.

In its response, PPC noted that it agrees on the existence of two consumer categories, offering fixed and floating tariffs, contending further categorization could ultimately unsettle consumers and even prompt negative perceptions of company offers as a result of the use of the high-risk tag.

Mytilineos group, in its remarks, noted that labelling a fixed tariff as a risk-free option would deprive consumers of the opportunity and incentive to change consumption habits or adopt options related to energy efficiency and savings.

 

Foreign institutional investors hold 50% of PPC for first time

Power utility PPC is entering a new era following yesterday’s completion of the corporation’s equity capital raise, which lowers the Greek State’s share in PPC below 51 percent, to 34 percent, for the first time in the utility’s 70-year history. Foreign institutional investors now hold an overall 50 percent stake in PPC, up from 27 percent, while domestic stakeholders have a 16 percent share.

Greek governments will no longer be able to do as they please with PPC. Issues concerning management, policies, strategic decisions and new hirings will now require the approval of foreign investors at the general shareholders’ meetings. The Greek State will remain influential with its 34 percent stake.

The corporation’s new equity line-up promises to transform PPC into a far more efficient corporation capable of achieving more favorable terms in capital markets.

The Covalis and Zimmer funds, among the new multinational stakeholders, specialize in utility investments. Wellington is regarded as a highly selective fund, more so than Blackrock, also part of PPC’s new equity line-up.

PPC easily achieved its 1.35 billion-euro target through the equity capital increase. The business plan, approved on the eve of the equity capital increase, envisions investments worth 8.4 billion euros between 2022 and 2026, but the amount is now seen rising to 9.3 billion euros. Investments are planned in renewables, networks, Balkan investments and waste management.

More than half the sum of new investments, or 55 percent, is planned for the RES sector, both in Greece and abroad. A further 20 percent is planned for distribution networks, 7 percent for conventional energy sources, 4 percent for waste-to-energy units and 3 percent for retail concerns.

Geographically, 85 percent of PPC’s new investments will be made in Greece, and 15 percent in the Balkans, primarily in Romania and Bulgaria.

PPC equity capital raise ending, shares must now be distributed

Power utility PPC now faces the favorable predicament of having to decide on how to distribute shares to funds following the overwhelming response to the utility’s equity capital raise that attracted dozens of major international players.

The final value of the offers submitted is expected to be announced today from 4pm onwards, once the book building process has been completed. Yesterday, the tally was four times over PPC’s 1.35 billion-euro target. Some 3.5 billion euros in offers are believed to have been made by international investors.

PPC needs to distribute the equity capital raise’s new shares by November 10 so that they may begin trading on the bourse by November 16.

Funds that have stepped forward with official offers, all worth over 100 million euros each, include Oak Hill, Covalis Capital LLP, Ghisallo Capital Management LLC, Marshall, Schonfeld Strategic, Zimmer Partners LP, Graticule Asset Management, and Helikon Investments, which already holds a 6.48 percent stake in PPC.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent for a multinational line-up. It will offer the corporation fresh capital for its enormous investment plan. PPC is striving to implement an ambitious 5 billion-euro investment plan by 2024.

PPC equity capital raise a hit, funds must now be picked

Power utility PPC’s equity capital raise, whose ongoing book building process ends tomorrow, has already achieved its target, a 1.35 billion-euro sum with an upper share price of 9 euros, the sum of offers greatly exceeding this sum, and now finds itself faced with the  favorable predicament of having to decide which of the more than ten participating international major-scale funds will be given the biggest share packages.

Yesterday’s requests were worth a total of 3.2 billion euros, taking the procedure’s total amount of offers made so far to four times the 1.35 billion-euro target, which would have been inconceivable just a couple of years back.

The major international funds have submitted requests for share packages each worth over 100 million euros. PPC cannot satisfy them all and will have to decide which of these participants it considers most formidable and with long-term investment intentions. These will receive the share packages they have requested and the others will be given smaller stakes.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan. PPC is striving to implement an ambitious 5 billion-euro investment plan by 2024.

The funds obviously see major investment returns over the next few years. PPC’s EBITDA is currently at 900 million euros but is forecast to rise to 1.73 billion euros by 2026 with net profit of 665 million euros and total turnover of 5.3 billion euros.

PPC makes waste-to-energy plans, RES moves worth €2bn in Balkans

Power utility PPC plans to develop waste-to-energy plants and also make RES investments in the Balkans worth two billion euros, a bulleting attached to the corporation’s ongoing equity capital raise, offering an update on the board’s strategic plan, has revealed.

The book building process, which began yesterday, will run until Thursday. Investors anticipate that PPC will enter new circular economy activities and also expand its green interests beyond Greece’s borders.

PPC expects to raise 1.35 billion euros through the equity capital raise, which will partially fund the corporation’s ambitious 5 billion-euro investment plan covering 2022 to 2024.

The power utility had initially announced a plan to enter the waste-to-energy sector in 2020 and is now reviving this part of its strategic plan.

This plan is in line with the overall national policy for waste management, developed in response to condemnation by European institutions of Greece for the country’s uncontrolled landfill management.

The power utility is expected to adopt advanced waste-to-energy technologies used in Europe’s north for the development of units making minimal environmental impact.

As for renewable energy, PPC has planned investments worth two billion euros between 2022 and 2026. Of this total, 820 million euros is planned to be invested between 2022 and 2024 and 1.11 billion euros from 2024 to 2026, according to the equity capital raise’s bulletin.

These sums are expected to be used for RES portfolio acquisitions. PPC is aiming for a green portfolio of 7.2 GW by 2024 to include extensive investments in the Balkans. Bulgaria and Romania are being targeted as markets of major potential.

 

PPC equity capital raise target reached in first hour of process

Power utility PPC’s equity capital raise objective, a 1.35 billion-euro sum, at 9 euros per share, was reached approximately one hour into the book building process, launched yesterday, sources informed.

This essentially means that the procedure’s shares will not be sold at a lower price (8.50 euros) but at the upper limit price of 9 euros per share.

The book building process will run until November 4. Shares will then be distributed to investors based on the offers they have submitted.

The equity capital raise is the first to staged by PPC twenty years after its bourse entry. An 85 percent proportion of the 1.35 billion-euro in capital is expected to be provided by foreign funds.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

PPC is striving to implement an ambitious 5 billion-euro investment plan by 2024.

The Greek State’s share in PPC will drop to below 51 percent for the first time in the corporation’s 70-year history. However, the Greek State will maintain management as well as blocking minority rights.

 

EBRD commits €75-100m for PPC equity capital raise

Further highlighting the tremendous investor interest in power utility PPC’s equity capital raise, EBRD has signed to participate with capital of between 75 and 100 million euros, a move following a commitment by major fund CVC Capital to invest between 350 and 396 million euros for a 10 percent stake in the energy company.

The equity capital raise’s book building commences tomorrow with over ten institutional investors from abroad considered certain to participate.

CVC and EBRD have both signed agreements with PPC while a series of other interested parties have pledged to participate. These include Fidelity, Oakhill, Shroeders, Apollo, Bluecrest and Pictet.

Despite Blackrock’s extensive talks with PPC, as well as City and Goldman Sachs, coordinating the equity capital raise, this major fund may not participate for reasons not yet known, according to some sources. Until now, Blackrock’s participation was seen as certain.

The raise may attract as much as 1.35 billion euros, of which 85 percent, or 1.15 billion euros, is expected to be provided by foreign investors.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

PPC is striving to implement an ambitious 8.4 billion-euro investment plan by 2026.

PPC equity capital raise’s share price, volume to be set today

The price level and volume of new shares to be offered through power utility PPC’s equity capital raise are expected to be finalized at a board meeting today.

The level of investor interest leading to the procedure has indicated that PPC may raise capital in excess of 1.2 billion euros, if reports pertaining to the issuance of between 130 and 140 million new shares are confirmed.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

PPC is striving to implement an ambitious 8.4 million-euro investment plan by 2026.

 

 

Medium-voltage sector affected by wholesale price clause

Medium-voltage consumers face further power cost increases following the introduction of a wholesale price-related clause by power utility PPC, the main supplier to this category, which includes super markets and retail chains.

PPC was also forced to introduce a wholesale price-related clause for the low-voltage category in August, as a result of skyrocketing wholesale electricity prices.

Unlike rival power suppliers, who have adopted wholesale price-related clauses, the power utility had previously only included a CO2 emission rights clause in its supply agreements.

This latest energy cost increase could end up overwhelming some of the medium-voltage category’s energy-intensive consumers, defined as enterprises with energy costs representing at least 30 percent of their total business costs.

Costs for producers in Greece have risen by levels ranging between 20 and 40 percent, according to industry association Hellenic Production. The energy crisis is making stronger impact on producers in Greece as wholesale market negotiations for electricity are conducted through the intraday market, whereas most energy deals in other European markets are based on bilateral agreements at fixed prices, the association noted.

Even so, the energy crisis is being felt by industrial players throughout the continent. A group of eleven major producers representing various sectors, including steel and cement production, have urged EU leaders to take emergency action to counter the extreme energy cost increases, a major threat to post-pandemic economic recovery.

 

PPC equity capital raise, early November, to reach €1.1-1.2bn

Power utility PPC’s imminent equity capital raise, approved at yesterday’s general shareholders’ meeting and now set for the board’s approval, expected late October or early November, will inject a sum estimated between 1.1 and 1.2 billion euros into the company’s coffers, estimates have indicated.

Over the next ten days or so, PPC will continue promoting the equity capital raise to funds and institutional investors.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

To date, the value of requests submitted by investors ahead of the book building process, expected late this month, has reached nearly two billion euros, triple the equity capital raise’s initial sum of 750 million euros.

The PPC board plans to meet either October 29 or November 1 to decide on the level of the equity capital raise, seen exceeding one billion euros, and also to approve it.

The book building process, to immediately follow, is expected within the first ten days of November.

Small-scale company shareholders expressed complaints during yesterday’s session, troubled by the prospect of being completely overshadowed, but PPC’s administration responded by noting they were free to take part in the upcoming equity capital raise.

Major funds, including CVC Capital and Blackrock, are believed to have requested big stakes during lead-up talks with PPC officials, while the overall investor interest is high.

 

Supplier overdue payments to operators reaches €350m

Overdue payments owed by energy suppliers to the country’s market operators have been on the rise since summer, now exceeding 350 million euros, a development that has prompted the government to consider implementing an installment-based payment schedule as part of the solution.

The sharp increase in wholesale electricity prices over recent months has had a severe affect on the cash flow of suppliers, putting them under major financial pressure.

However, it should be pointed out that the majority of this 350 million-euro amount owed by suppliers to operators concerns the power utility PPC and includes a considerable amount owed from long before the current energy crisis.

Power grid operator IPTO, distribution network operator DEDDIE/HEDNO, and RES market operator DAPEEP are all owed sums by the country’s suppliers.

RAE, the Regulatory Authority for Energy, is now considering a three-part solution entailing:  provision of letters of guarantee by suppliers to the operators, to prevent any further rise of the debt owed; immediate deposits covering 50 percent of amounts owed, either in cash or through bank guarantees representing equivalent amounts; and settlement of the remaining 50 percent through an installment-based schedule of between 8 to 12 payments, depending on respective agreements.

PPC shareholders meet today to approve equity capital raise

Power utility PPC is scheduled to stage a landmark general shareholders’ meeting today for approval of its imminent equity capital raise, which, once completed early next month, will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

The company board is anticipating complaints at today’s session from small-scale investors, mainly domestic shareholders troubled by the prospect of losing preferential shareholder rights.

Major international funds and institutional investors are preparing to move in and overshadow the smaller private investors. PPC has promised smaller shareholders will not be neglected.

To date, the value of requests submitted by investors ahead of the book building process, expected late this month, has reached nearly two billion euros, triple the equity capital raise’s initial sum of 750 million euros.

In response, PPC appears to have revised its equity capital raise, which could exceed one billion euros.

The strong investor interest is reflected by the company’s share price, which ended trading yesterday at €9.15, fully regaining losses incurred over the past three weeks.

Genop, PPC’s main union group, has announced strike action for today in protest against the equity capital raise, as well as a news conference.

Major foreign fund interest in PPC equity capital raise

Foreign funds are expressing major interest in power utility PPC’s upcoming equity capital raise, whose 750 million-euro plan appears set to be oversubscribed approximately three times, according to banking and brokerage sources.

Though the procedure is not expected to take place until early next month, funds and institutional investors have already submitted requests worth nearly two billion euros, five days before the October 19 general shareholders’ meeting, during which PPC shareholders will be asked to approve the company’s equity capital raise.

The company’s share price, which ended trading yesterday at €8.90, has now fully regained all losses incurred over the past three weeks, reflecting increased overall confidence in the forthcoming equity capital raise.

If the strong investor interest in the lead-up is confirmed through the book building process, expected late in October to determine the price at which the share will be offered, then PPC can expect to raise at least one billion euros through the equity capital raise.

PPC lignite-fired electricity package sales to rivals for ’22 progressing fast

Power utility PPC is moving ahead at full speed with its offering of lignite-fired electricity packages to rival suppliers as part of a recent antitrust agreement reached between the energy ministry and the European Commission.

Lignite-fired electricity packages offered by PPC to rivals, covering all four quarters in 2022, have so far resulted in sales amounting to 1,740 GWh for next year.

PPC will need to sell, to rival suppliers, lignite-fired electricity packages estimated at a little over 2,100 GWh for the first, second and third quarters of 2022.

Sales have so far reached 475 GWh for the first quarter, 382 GWh for the second quarter, 386 for the third quarter and 497 GWh for the fourth quarter.

Transactions for most of the 1,740 GWh in lignite-fired electricity sales completed have taken place through the European energy exchange, reaching 1,697 GWh.

Transactions through the Greek energy exchange were limited to 43 GWh, for quantities concerning 1Q in 2022. PPC made available bigger quantities without attracting buyers.

Analysts partially attributed this reservation to the adverse conditions currently faced by domestic suppliers, who, as a result of exorbitantly higher wholesale electricity prices, are being forced to spend far greater proportions of cashflow on electricity purchases covering the current needs of customers, which has prevented them from considering futures contracts.

 

PPC lignite antitrust legislation forbids back-to-back agreements

The energy ministry is preparing a legislative revision for its recent antitrust agreement with the European Commission, requiring state-controlled power utility PPC to make available lignite-fired electricity packages to rival suppliers.

The antitrust agreement, already launched by PPC and designed to break its lignite monopoly, requires the utility to offer quarterly lignite-fired electricity packages from September 10, 2021 to December 31, 2024, if still needed.

Details in the plan forbid PPC to conduct back-to-back agreements with rival suppliers, or sale and repurchase of lignite quantities.

According to the plan, PPC, from the fourth quarter of 2021 until 3Q in 2022, must offer rival suppliers lignite-generated electricity quantities representing 50 percent of generation in the corresponding quarters a year earlier.

The upcoming legislative revision will spare PPC from needing to split away lignite divisions into two new companies for subsequent sale, as had been stipulated by legislation ratified by the country’s previous administration.

All existing lignite facilities in Greece are expected to have been withdrawn by the end of 2023, according to the country’s decarbonization plan.

 

 

PPC must market over 2,100 GWh in lignite-fired power by end of month

Power utility PPC needs to move fast this month with its offering of lignite-fired electricity packages to rival suppliers as part of a recent antitrust agreement reached between the energy ministry and the European Commission.

According to the agreement, PPC must market lignite-fired electricity packages for the first, second and third quarters of 2022 by October 31, either through the European or Greek energy exchange.

The three packages also face imminent sale deadlines. All transactions for electricity quantities offered to PPC’s rivals through the first package will need to be completed by the end of November, while transactions for the 2Q and 3Q packages must be done and dusted by December 31.

As for the quantities to be offered, PPC’s 1Q and 2Q lignite-fired packages must total 872 and 515 GWh, respectively. The power utility’s 3Q package will need to offer rivals 50 percent of the company’s lignite-fired power generated in the third quarter this year.

According to data provided by power grid operator IPTO, PPC’s lignite-fired power stations produced 1,081 GWh in July and August, while September’s output has been estimated at 370 GWh.

Given these figures, totaling 1,451 GWh, PPC will need to offer a lignite-fired package of 725 GWh for the third quarter next year, taking the total offering for 1Q, 2Q and 3Q in 2022 to just over 2,100 GWh in futures contracts that must be marketed through either of the two aforementioned exchanges by the end of this month.

 

Major foreign fund interest in PPC equity capital increase

Power utility PPC, preparing to stage an equity capital increase later this month, seen reaching one billion euros, is reportedly receiving a mass inflow of enquiries by funds from around the world, including the US, UK, France, western Europe, and Australia, expressing interest to acquire sizeable company stakes in excess of ten percent.

PPC is currently engaged in a continual flow of talks with investors ahead of the company’s general shareholders’ meeting, scheduled for October 19.

The power utility remains committed to its initial goal of maximizing participation for as many quality funds as possible, preferred over the participation of a limited number of funds.

The equity capital increase’s share price is expected to be set between 8 and 8.50 euros per share.

Taking, as an indicator, the interest of funds in the still-unfinished 49 percent privatization of distribution network operator DEDDIE/HEDNO, a PPC subsidiary, interested parties in the power utility’s equity capital increase could include Macquarie, the winning bidder in the DEDDIE/HEDNO privatization, CVC Capital, Blackrock, Ardian, KKR, First Sentier, Oak Hill, and Helikon Investments Limited, already holding a 5 percent stake in PPC.

The interest may also include players who placed offers for PPC’s 7-year bond issue in July. They include EBRD, Fidelity, Apollo, Carmignac, Twenty Four AM, Bluecrest and Pictet, Union Investments, Sona Asset Management, Barings, Aperture, Saba Capital and Vontobel.

In addition, a number of other players expressed early interest during roadshows late last year. These include Bell Rock Capital, Allianz Global Investors, Sephora Investment Advisors, Waterwill Capital Management, Cleargate Capital, and Zenon Investments.

The upcoming equity capital raise is expected to result in a decrease of privatization fund TAIPED’s current stake in PPC from 51 percent to 34 percent.

Major investment interest in PPC equity capital increase

Power utility PPC’s equity capital increase, planned for late October, is expected to attract over one billion euros, in excess of the 750 million-euro amount initially announced, strong interest by foreign institutional investors, including major US interest, as well as dozens of meetings lined up for the coming weeks with potential participants, has indicated.

The next fortnight or so is expected to be filled with non-business news concerning PPC’s equity capital increase, the related topics to include discussion on possible participants, as well as political debate over the equity capital increase, effectively a partial privatization that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

The development promises to free the utility from restrictions imposed on state-controlled companies, boost its finances and enable the company to further consolidate its position as the dominant market player. Small and big energy players are expected to be impacted by the PPC move. Talk of takeovers is already brewing.

The equity capital increase, along with PPC’s not-yet-finalized sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a subsidiary, to Australian fund Macquarie for 2.116 billion euros, will offer crucial financial support for PPC’s 8.5 billion-euro investment plan covering the next five years. Green energy production and ventures abroad are the plan’s key objectives.

PPC fulfils 4Q antitrust lignite obligation for supply to rivals

Power utility PPC has fulfilled its fourth quarter antitrust obligations concerning the supply of lignite-fired electricity packages to third parties by securing futures contracts through the Greek and European energy exchanges for an electricity amount that exceeds the quantity stipulated in the government’s agreement with the European Commission, energypress sources have informed.

According to the agreement, which has resolved a long-running antitrust case concerning PPC’s monopoly in the lignite sector, the power utility, in the fourth quarter, needed to offer third parties a total electricity amount representing at least 50 percent of lignite-fired generation recorded for the equivalent period last year.

PPC’s lignite-fired power stations generated 1,785 GWh in the fourth quarter last year, meaning the amount the utility was expected to provide for the corresponding period this year was approximately 893 GWh.

Until yesterday, a day ahead of today’s deadline of its futures contracts, PPC had already secured deals for electricity packages representing a total of 978 GWh.

A first package of futures contracts was exclusively offered through the European energy exchange in Leipzig on September 17 at an average price of 153.75 euros per MWh, followed by three more packages, on September 23, 24 and yesterday.

PPC Renewables, RWE set to finalize joint venture agreement

PPC Renewables, a power utility PPC subsidiary, and Germany’s RWE Renewables are expected to finalize a joint-venture agreement at the beginning of October for solar energy projects in Greece to offer a total capacity of nearly 2 GW.

PPC Renewables plans to contribute to the joint venture 940 MW in solar energy projects at Amynteo, the northern Greece location hosting 4,360 hectares in company lignite fields to be repurposed as part of the decarbonization effort. The Greek company has already received a first round of environmental permits.

RWE Renewables is at the final stage of its search for solar energy projects to total 1 GW.

The two partners will begin their collaboration with the Amynteo project. They plan to begin its development in the first half of 2022. PPC Renewables has established nine special purpose vehicles for these projects.

RWE Renewables, holding a 51 percent stake in the joint venture, has already established a Greek subsidiary, RWE Greece, currently being staffed.

Talks between PPC Renewables and RWE Renewables have intensified since early summer. The respective company heads, Konstantinos Mavros and Katja Wünschel, discussed the prospective partnership at the recent 5th Greek-German Economic Forum, while RWE officials have also visited Athens for negotiations.