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Greece Sells Majority Stake of Public Power Corporation

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Greece to reduce stake at the Public Power Corporation. Credit: AMNA

Greece’s Public Power Corporation (PPC) is expected to complete a share capital increase plan worth around 750 million euros by early November, following a decision reached by its board on Thursday.

The process is set to bring the state’s share in the company below 51 percent, from the current 55.05 percent the state controls directly or indirectly. The state, however, is expected to maintain the controlling vote.

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Final approval to the plan is expected to be given by PPC’s shareholders during a general meeting scheduled for October 19, while the board has already begun contacts with international investors and marked significant interest in the plan.

Sale to finance investment program

The money to be raised will be used to finance PPC’s investment program, designed to reach 8.4 billion euros by 2026. Under the plan, the share capital increase scheme is recommended to exclude shareholders’ rights, although a distribution mechanism to offer new shares to existing shareholders could be used.

“The share capital increase will enable PPC to complete its ambitious transformation plan that started in 2019 and already yielding tangible results, as well as accelerate its transformation into a financially and environmentally sustainable, modern digital utility,” chairman and CEO Georgios Stassis said on Thursday.

The Greek utility is currently implementing a plan to phase out its coal-fired power generation capacity and green up its power mix. By 2026, its goal is to have 9.1 GW of renewable power plants in operation, including hydropower stations.

Apart from renewables, the raised funds will back PPC’s plan through 2026 to expand its business into markets beyond, Greece, especially in Southern Europe and enhance its capital structure.

Earlier in September, HEDNO, a PPC subsidiary, has sold 49 percent of its stake to Australia’s Macquarie Infrastructure and Real Assets Group (MIRA), the highest bidder.

Opposition slams government on sale of public power utility

Opposition parties in Greece have launched a scathing attack on the government, saying that the decision to reduce the state’s share on PPC deprives the state of an important tool for pursuing energy policy.

“The Mitsotakis government decided, in the midst of an energy crisis and a price explosion, to sell out the PPC, that is, to deprive the state of such an important tool for pursuing energy policy, in favor of the social majority,” main opposition SYRIZA-Progressive Alliance spokesman Nassos Iliopoulos said on Friday.

“Market analysts estimate that the price explosion is not a temporary phenomenon that will last until Christmas, but it will last at least 6 to 9 months,” he added, noting that “based on the same estimates, within this period Greek households will be asked to pay the cost of the increase in electricity that reaches a total of 1 billion euros.”

Movement for Change (KINAL) party accused the government of handing over the PPC to private interests. In a statement the party pointed out that this is happening at a time when rising energy prices are threatening households and businesses.

According to KINAL, “the Hellenic Republic Asset Development Fund and the Superfund will not participate in PPC’s sudden share capital increase, paving the way for the concession of the main pillar of our energy system and leaving the citizens and the Greek economy unprotected from the consequences of the large increases in electricity prices.”

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