Greek power utility shareholders approve grid spin-off

Keeping the lights on in Greece. [Umberto Salvagnin/Flickr]

Shareholders of Greece’s power utility Public Power Corp. (PPC) approved yesterday (17 January) the transfer of a 51% stake in the power grid operator ADMIE, part of a spin-off scheme, which is a major term in Greece’s bailout programme.

Under a legislated scheme aiming at keeping ADMIE under state control, PPC will sell a 24% stake to China’s State Grid for €320 million and set up a special vehicle to transfer a cost-free 51% stake to the state and existing private shareholders.

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“The extraordinary PPC shareholders meeting approved the procedures in order to conclude ADMIE’s spin-off,” the energy ministry said in a statement.

In 2015, Greece signed up to its third international bailout since the debt crisis erupted, agreeing to cut spending, pursue reforms and speed up privatisations to shore up its finances.

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Panos Skourletis, the new Greek energy minister, is tasked with a heavy reform agenda that could help revive the cash-strapped Greek economy and make the country return to growth. But the stakes are high.

ADMIE is fully owned by Greece’s state-controlled electricity utility PPC and Athens has agreed to conclude the plan by the end of March or fully privatise the grid this year.

Shareholders were due to approve the stake transfer on 12 January but their meeting was postponed until Tuesday after Greece’s four biggest banks expressed concerns over the plan.

National Bank, Piraeus Bank, Alpha Bank and Eurobank, which have extended a €2.2 billion syndicated loan to PPC, sent a letter to the PPC and the finance ministry last week, saying that the sale of the 51% stake without any proceeds for PPC would harm the utility’s finances.

After talks between all parties involved, the banks sent another letter to PPC and the finance ministry on Tuesday saying they were examining positively PPC’s servicing of the loans after being given guarantees worth at least €300m.

The utility has paid off some €600m of the syndicated loan and has been negotiating an additional €200m credit facility with the banks. According to the letter which was released by PPC, the banks also said they would examine providing short- and medium-term financing to PPC in exchange for tantamount guarantees.

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