The Greek government is examining ways to speed up the privatization of Public Power Corporation within 2011, as IMF/EU/ECB requested, but it encounters several obstacles.
According to sources, the acceleration of selling of a 10% or 17% stake of PPC to privates investors is under consideration. The reduction of state’s participation to 34% has been scheduled officially for 2012, while Greece will maintain the control and management.
Market sources note that there is interest from at least two investors. Italian company ENEL, with which there is already an agreement for joint investments in Balkans, and German RWE are the two interested parties.
Those, who support a faster privatization of PPC, indicate that the entrance of an investor would have the advantage of better performance, but the sale of packages through the Athens Stocks Exchange could limit the benefit to €500m because of the low market valuation.
This amount, officials note, does not reflect the true value of PPC, and equals to the profits of a “good” 5-year period.
Before any development occurs, the issue of European Commission’s decision in 2008 must be resolved, regarding the sale of 40% of lignite production to private companies. The government is in contact with Brussels, while Energy Minister Tina Birbili said recently that a solution is already found.
But she implied that that the privatization should come first, otherwise it would cause further reduction of PPC’s profitability. Ministry sources noted that European Commission could be convinced that the reduction of state’s participation decreases or removes the need for reduction of lignite production, as there would be another investor.
Officials state that the solving of the issue with the European Commission would consists another reason for acceleration of privatization process. But the objections of PPC’s workers’ union GENOP and the compensation of the company for the option of purchase of 30% of gas company DEPA are two more obstacles.
According to sources, the acceleration of selling of a 10% or 17% stake of PPC to privates investors is under consideration. The reduction of state’s participation to 34% has been scheduled officially for 2012, while Greece will maintain the control and management.
Market sources note that there is interest from at least two investors. Italian company ENEL, with which there is already an agreement for joint investments in Balkans, and German RWE are the two interested parties.
Those, who support a faster privatization of PPC, indicate that the entrance of an investor would have the advantage of better performance, but the sale of packages through the Athens Stocks Exchange could limit the benefit to €500m because of the low market valuation.
This amount, officials note, does not reflect the true value of PPC, and equals to the profits of a “good” 5-year period.
Before any development occurs, the issue of European Commission’s decision in 2008 must be resolved, regarding the sale of 40% of lignite production to private companies. The government is in contact with Brussels, while Energy Minister Tina Birbili said recently that a solution is already found.
But she implied that that the privatization should come first, otherwise it would cause further reduction of PPC’s profitability. Ministry sources noted that European Commission could be convinced that the reduction of state’s participation decreases or removes the need for reduction of lignite production, as there would be another investor.
Officials state that the solving of the issue with the European Commission would consists another reason for acceleration of privatization process. But the objections of PPC’s workers’ union GENOP and the compensation of the company for the option of purchase of 30% of gas company DEPA are two more obstacles.
