Despite assurances from leading main power utility PPC officials, claiming that a 200 million-euro loan being negotiated with the country’s four main banks is close to being approved, work is still needed if a deal is to be reached.
PPC needs to cover the payment of a 200 million-euro bond set to mature next month. The utility will need to find an alternative financing solution for this bond payment if a loan agreement with the four banks is not finalized prior to its maturity date.
It remains unclear which of three pending issues is holding back the loan’s approval. Firstly, PPC needs to establish a special account to be controlled by the banks and into which an agreed proportion of client payments will be channelled. Secondly, the two sides need to bridge a gap concerning the loan’s interest rate to be set. The banks are demanding a rate of around 6.25 percent while PPC has stated it will not accept anything over 5.5 percent. Thirdly, PPC will need to commit itself to the return of a quarter of the capital – 50 million euros – within the current year.
“We are very close to resolving the pending issues with the banks for the 200 million-euro loan,” a leading PPC official noted. Asked to name which of the three issues is, or are, delaying the loan’s endorsement, the official remarked: “We are still negotiating.”
PPC is weighed down by a considerable cash flow problem. The utility has attributed the problem to its unpaid receivables. PPC’s chief executive Manolis Panagiotakis recently told Greek Parliament that the figure amounts to 2.65 billion euros.
Payback plans through monthly installments have been arranged for 800 million euros of the total amount, the PPC boss noted, adding that 550 million euros concerns electricity supply accounts that are no longer valid.
Some 85,000 clients owe PPC amounts of over 3,000 euros for a total unpaid receivables figure of 500 million euros.