PPC must sit out 60-day waiting period for IPTO sale

The main power utility PPC will need to wait until early April, the latest, as a result of an agreement reached between the government and banks, before it can further pursue its split-and-sale plan for subsidiary firm IPTO, the power grid operator.

A waiting period of 60 days – from the January 17 PPC shareholders meeting during which the IPTO sale was approved – needs to expire in case PPC creditors and suppliers raise objections to the IPTO sale plan.

Though there are no signs of creditor objections for the time being, the European Investment Bank (EIB), PPC’s biggest foreign creditor, as well as a range of suppliers owed both small and major amounts have yet to offer finalized opinions on the IPTO sale plan. Besides the banks, suppliers, too, have the right to raise objections to the sale.

Despite the EIB’s silence on the issue so far, it is generally believed that this institution will opt to not obstruct the IPTO sale process as the loans it has extended to PPC are state-guaranteed.

Plenty of work is also still required to overcome legal and technical issues. A large number of IPTO’s high and medium-voltage power supply agreements need to be processed.

The Single Supervisory Mechanism (SSM), which gives the European Central Bank certain supervisory tasks over the EU financial system, also has a say in the IPTO matter. The SSM will need to endorse the agreement reached between the Greek State and banks on loans extended to PPC and the IPTO sale plan. SSM approval is also needed for PPC to secure a new 200 million-euro EU loan.

The next few weeks will be crucial as responses on the IPTO sale plan are expected from SSM, the European Commission’s Directorate-General for Energy, the EIB and the scores of PPC supplier-creditors.

PPC will face major bond refinancing challenges over the next few months. The aforementioned issues will need to have been resolved by then.