PPC, heavyweight firm close to big-scale securitization deal

Power utility PPC is believed to be making sound progress in its negotiations with a financial world heavyweight for an agreement on a securitization package carrying unpaid receivables overdue by at least 90 days, making it a high-risk venture, energypress sources have informed.

A deal is believed to be imminent and could be presented to the PPC board next week, the sources noted, adding that an agreement will definitely be finalized within July.

These talks follow PPC’s recent agreement with JP Morgan for an initial, smaller-scale, lower-risk securitization package carrying unpaid receivables of up to 60 days.

PPC secured a cash injection of approximately 250 million euros through this agreement and an interest rate of 3.5 percent, regarded extremely favorable.

The higher risk entailed in the forthcoming securitization package is expected to lead to a considerably higher interest rate than the figure agreed to between PPC and JP Morgan.

Even so, the overall securitization procedure indicates that PPC’s credibility is gradually being restored as major players are showing greater faith in the utility’s ability to handle its unpaid receivables.

Both the previous securitization agreement and the one currently in the making are non-recourse agreements not requiring PPC to provide guarantees.

Debt collection services firm Qualco and legal firms hired by PPC will continue handling the collection effort.

PPC aims to receive approximately 300 million euros for the second securitization package.

Besides the absence of guarantees, the securitization agreements represent yet another source of funding for PPC that is not added to the company’s debt figure.

JP Morgan awarded PPC’s small securitization package

US investment bank JP Morgan has been awarded power utility PPC’s smaller of two securitization packages, carrying unpaid receivables of up to 60 days, after submitting the strongest offer to a tender at a rate of 3.5 percent.

This agreement, expected to be endorsed by PPC’s board today, represents the first, and simpler, step of the utility’s securitization plan, to be followed by a bigger-scale effort in September for unpaid receivables of at least 90 days. PPC expects an interest rate of more than 7 percent for this second package, carrying higher risk.

PPC’s securitization plan reflects the corporation’s ongoing effort to gradually regain its credibility. Offering unpaid receivables packages for cash injections would have seemed unimaginable a year ago.

The deal with JP Morgan is a non-recourse agreement, meaning PPC will not need to offer guarantees.

If companies (Qualco, legal firms) that have taken on the task of collecting unpaid receivables from PPC customers, on behalf of the utility, do not succeed, then JP Morgan, as buyer of securitization titles, will incur losses to the extent of the failure.


PPC, facing €3.5bn unpaid bills amount, boosts collection effort

Intensifying its debt collection effort over the past month, the main power utility PPC, whose unpaid receivables figure has reportedly risen to over 3.5 billion euros, has ordered some 340,000 customers to settle unpaid electricity bills and plans to soon forward thousands more payment orders, all signed by legal officials.

Consumers who have failed to make payments over two consecutive four-month billing periods are being targeted, regardless of amounts, sources informed.

The initiative has drawn many household and business consumers to the power utility’s outlets for immediate settlement of unpaid amounts or, most commonly,  payback program arrangements not exceeding 24 monthly installments.

Payback plan terms being offered to customers are not standardized but shaped in accordance with individual customer profiles and track records.

Debt collection services firm Qualco, hired by PPC for unpaid receivables support, has joined the effort by sub-contracting fellow debt collection and law firms to notify customers of their electricity bill arrears. Qualco has pledged to collect 450 million euros for PPC over the next nine months.

A PPC business plan prepared by consulting firm McKinsey has set a debt collection target of between 690 million and 1.1 billion euros.


PPC now less tolerant in unpaid receivables collection effort

The main power utility PPC, struggling to cope with unpaid receivables of 2.77 billion euros, more than 50 percent of last year’s total turnover figure, has reduced its tolerance level and is now issuing power supply cut orders for consumers owing 500 euros or less.

Until recently, the power utility kept away from consumers owing electricity bill amounts up to 1,000 euros. To their surprise, PPC customers of this category have had to deal with power supply cut orders over the past month and a half.

Consumers who have missed out on servicing one or more monthly payback installments are among those targeted by PPC. In many cases, consumers have signed up for payback agreements in order to reinstall power supply only to stop honoring the arrangement soon after.

PPC is also hunting down customers who have employed an incredible array of tricks to remain elusive – including property transfers to other names.

Moreover, the power utility is pursuing households found to have been providing false information to qualify for subsidized electricity, reserved for vulnerable groups through the Social Residential Tariff (KOT) account. In some cases, multi-member families have provided false age information on children to qualify for KOT subsidies, PPC has determined. Family members aged as high 30 have been presented as underage children, the power utility found.

PPC’s more aggressive power supply cut policy is not linked to the work of Qualco, the debt collection services firm hired by the power utility to ease its unpaid receivables problem.

Qualco has so far raked in 25 million euros of unpaid receivables for PPC from a total of approximately 180 million euros owed to the utility by 65,000 customers selected for a pilot program awarded to the debt collector, according to details presented at PPC’s most recent board meeting a few weeks ago.

PPC’s initial collection target for the year is believed to have been set at at least 100 million euros. Qualco is believed to have promised to collect a further 450 million euros over the next nine months.

PPC faces 30% loss of unpaid receivables, consumers gone

The main power utility PPC’s inability to lower its alarming unpaid receivables figure, estimated at 2.77 billion euros, more than half the power utility’s total turnover in 2017, highlights that the company has been struck by yet another wave of bad-debt customers.

Thousands of vanished-category customers have not only failed to reduce amounts owed to the power utility but increased the overall amount owed to PPC by this category from roughly 413 million euros a year and a half ago to 800 million euros at present. This figure stood at 700 million euros in February, meaning it is on an upward trajectory.

These debt amounts have been created by customers who have either interrupted power supply to holiday homes not being used or shifted to new suppliers, while, in addition, turned to various tricks to vanish from PPC’s radar.

Methods applied have included tax file number changes, an approach that has helped PPC customers with arrears avoid market rules and break free to new suppliers, according to the debt collection services firm Qualco, hired by PPC for support.

PPC has reported an official unpaid receivables figure of 2.42 billion euros, but the addition of 350 million euros concerning 354,000 customers who have registered for debt settlement programs through monthly installments increases this sum to 2.77 billion euros.

PPC and its hired support team now need to decide whether the 800 million-euro debt amount owed by vanished customers should be written off as bad debt. This is not an easy decision to take as the sum represents roughly 30 percent of the power utility’s official unpaid receivables figure.

PPC unpaid receivables steady at €2.77bn, Qualco nets €25m

Debt collection services firm Qualco has so far raked in 25 million euros of unpaid receivables for the main power utility PPC from a total of approximately 180 million euros owed to the utility by 65,000 customers selected for a pilot program awarded to the debt collector, the power utility’s chief Manolis Panagiotakis has told the board at a meeting held to discuss extending Qualco’s contract.

Though Panagiotakis indicated the results are satisfactory, the level of PPC’s unpaid receivables has remained stubbornly high, dropping only slightly since the beginning of the year.

According to official data believed to have been presented by the PPC boss at yesterday’s board meeting, low-voltage customers (houses, small shops) owe a total of 1.7 billion euros; mid-voltage customers (small-scale industries, businesses) owe 150 million euros; high-voltage customers (major-scale industries) owe 370 million euros; and the public sector owes a total of 200 million euros.

Though the total debt amount of these four consumer sub-categories adds up to 2.42 billion euros, a further 350 million euros concerning 354,000 customers who have registered for debt settlement programs through monthly installments also needs to be factored in. This additional sum brings PPC’s unpaid receivables sum to a grand total of 2.77 billion euros, virtually unchanged since the beginning of the year. This unpaid receivables figure constitutes over 55 percent of PPC’s total turnover, based on last year’s performance of 4.94 billion euros.

It is unclear whether modest debt collection gains made by PPC have been offset by new unpaid receivables.

Some 800 million euros of the 2.77 billion-euro unpaid receivables sum are owed by customers who have either shifted to new suppliers or disrupted their electricity supply for a variety of reasons (holiday home cutbacks, business closures etc).

According to sources, an extension of Qualco’s contract would commit the debt collector to net a further 450 million euros for PPC over the next nine-month period. If this target is achieved, then the debt collector’s fee is expected to increase by 50 percent from the initial contract’s 12 million euros to 18 million euros, the sources informed.

The next update on the power utility’s debt collection effort is scheduled to be presented at a PPC board meeting in September.



PPC board to discuss extending Qualco debt collection contract

The main power utility PPC’s board is expected to discuss extending its contract with debt collection services firm Qualco, hired to help to reduce the utility’s level of unpaid receivables, currently estimated at 2.4 billion euros.

Qualco’s initial effort, launched as a pilot program for approximately 100,000 to 120,000 PPC customers, is expected to be broadened to reach about two million.

PPC has expressed mild satisfaction with the debt collection services firm’s results so far.

Reducing the unpaid receivables level represents PPC’s biggest challenge this year as the effort’s outcome is not only crucial for the utility’s sustainability but also its ability to keep offering a generous electricity bill discount to punctual customers, chief executive Manolis Panagiotakis has pointed out.

Qualco is expected to exceed its unpaid receivables collection target of 50 million euros this year and rake in 150 million euros, projections have indicated.





Qualco debt collection test run on PPC customers successful

A pilot program staged by debt collection services firm Qualco, hired by the main power utility PPC for support in its effort to reduce its unpaid receivables, has produced favorable results with many participating customers either agreeing to monthly installment payback terms for electricity bill arrears or settling outstanding amounts.

Thousands of PPC customers were contacted by Qualco via telephone calls, the debt collection services firm’s objective being to test a plan it intends to implement on a wider scale.

Prior to launching this test run, Qualco categorized PPC customers based on criteria such as occupation, past behavior, location and electricity consumption patterns.

The debt collection services firm adopted a mild approach when contacting PPC customers and did not resort to legal threats of any form, according to sources.

Qualco’s pilot program was staged over a two-month period and involved approximately 120,000 PPC customers with arrears.

PPC’s need to reduce its unpaid receivables figure, currently at an alarming level of at least 2.3 billion euros, was added as a term to the latest bailout update. The country’s lenders view punctualty in electricity bill payments as essential for a balanced electricity market.

A target collection figure set by Qualco for this year, believed to be 50 million euros, will most likely be tripled, according to a projection made by the debt collection firm.

The country’s four main banks are also involved in this PPC unpaid receivables collection effort. It is believed they will seek to secure amounts collected for the servicing of a 1.3 billion-euro joint loan extended to the power utility.

PPC has just announced it is toughening the terms of its existing payback program, based on deposit payments followed by monthly installments.


PPC loses track of 100,000 clients owing amounts in a year

The main power utility PPC has lost track of some 100,000 customers owing electricity bill amounts over a year, between the end of 2016 and the end of 2017.

The utility’s vanished customers, who, most recently, have resorted to changing their tax file numbers, owe approximately 700 million euros to PPC. This 700 million-euro amount, which includes debt owed by firms that have been out of business for decades, represents roughly 30 percent of the utility’s unpaid receivables total.

PPC and debt collection firm Qualco, hired by the utility in November, are currently investigating the matter in an effort to get vanished customers back on the radar.

During the recession’s early days, PPC lost many customers who chose to interrupt electricity supply at properties not being used, but the tax file number changing initiative appears to be a new and more desperate way of cutting ties with the utility.

PPC officials and technocrats representing the country’s lenders held a meeting on Monday to discuss the power utility’s unpaid receivables issue, including debt owed by the Greek State, as well as the current collaboration between the power utility and Qualco.

The lender representatives showed no signs of preparing extraordinary measures, an energypress source informed.




PPC board set to approve Qualco for debt collection services

The main power utility PPC’s board is today expected to endorse a consortium headed by Qualco that was recently declared the winning bidder of an international tender offering a contract for specialized debt collection services concerning the utility PPC’s unpaid receivables, estimated at 2.5 billion euros.

According to sources, all offers submitted were within close range.

Finacity Corporation, IBM Hellas, Deutsche Bank London Branch, Estia Business Group, Deloitte Business Solutions, KPMG, Kapa Research, Nikolaos A. Andrikopoulos and Associates law firm, PWC, Alpha Bank, and Mellon also took part in the tender.

Qualco, the winning bidder, has been active in the debt collection services sector since 1998. To date, the firm has been commissioned by 70 customers in 15 countries.

According to the terms of the tender, announced last May, the consortium will need to prepare a detailed collection plan within two months of the contract’s date.

Over 1.5 million PPC customers are included on the utility’s unpaid receivables list. Qualco, which is expected to begin the hunt by focusing on 120,000 major-scale debtors, will receive commission fees based on customer categories and results.

For every 100 million euros collected from existing PPC customers, the firm will be paid an 8 percent commission, or 8 million euros. For total amounts of 10 million euros collected from customers owing up to 2,000 euros each, the collection firm will receive a 12 percent commission, or 1.2 million euros. For collections totaling 14 milion euros and concerning customers owing over 2,000 euros each, the firm stands to receive a 10 percent commission, or 1.4 million euros.

Consortium led by Qualco takes on PPC’s debt collection

An eight-member consortium named Fina City Corporation and headed by Qualco has been declared the winning bidder of an international tender offering a contract for specialized debt collection services concerning main power utility PPC’s unpaid receivables, which have reached a level of at least 2.3 billion euros.

Besides Qualco (UK), a debt collection firm that has offered its services to some 70 enterprises in 15 countries since its launch in 1998, the consortium’s other members are IBM Hellas; Deutsche Bank London Branch; Estia Business Group; Deloitte Business Solutions; KPMG; Kapa Research; and the Nikolaos A. Andrikopoulos and Associates law firm.

According to the terms of the tender, announced last May, the consortium will need to prepare a detailed collection plan within two months of the contract’s date.

The consortium, which maintains the right to sub-contract work to additional partners, will operate from a PPC base with a 30-member team.

The consortium is to receive 1.3 million euros for the first four stages of its overall five-stage task, as well as additional payments for collection of unpaid receivables. These payments will depend on the amounts raked in.

If the consortium manages to collect at least 100 million euros from PPC customers, it will receive an additional 8 percent (8 million euros) for its services. If it collects 10 million euros from customers owing amounts of up to 2,000 euros, then another 12 percent (1.2 million euros) payment will be offered. Collection of at least 14 million euros from PPC customers owing amounts in excess of 2,000 euros will ensure the consortium a further 10 percent payment (1.4 million euros).

Qualco, founded by Orestis Tsakalotos, a cousin of Greek finance minister Euclid Tsakalotos, became widely known when it established a partnership with PWC Business Solutions and Hoist Kredit Aktiebolag, named PQH, to take on bad loans for local banks.