Banks may force PPC to part with power network operator DEDDIE
Public Power Corporation’s tough challenge of refinancing its loan obligations of 2.2 billion euros by the end of 2019 is forcing the company to contemplate the sale of assets such as DEDDIE, its 100 percent subsidiary that operates the country’s power network.
The issue of debt refinancing has re-emerged as the creditor banks are setting strict terms due to close monitoring by the European Central Bank’s Single Supervisory Mechanism (SSM). The lenders have no margin for any flexible handling of such a sizable loan.
A senior banking source has told Kathimerini that “we will see what price PPC will get from selling its lignite units. However, there are also some other assets that would be of interest to investors, such as DEDDIE,” making clear the banks’ intention to associate the refinancing process with the reduction of their exposure to PPC loans through the sale of additional assets.
Such an approach will trouble the government, which is trying to calm the unions’ and local communities’ reactions to the sale of the Florina and Megalopoli lignite units by offering various offsetting proposals, such as special power rates. This is why the government is playing the “too big to fail” card, in the hopes that banks will feel obliged to refinance PPC.
As yet, no formal proposal has been made to the company to sell DEDDIE, but if the creditor banks do insist on it, PPC will be forced to lose its most profitable portfolio after power transmission operator ADMIE. In the first half of 2017 DEDDIE contributed 28.8 million euros to PPC’s profits. Its turnover in the same period amounted to 388.5 million euros and today DEDDIE manages a medium- and low-voltage network of 237,727 kilometers, employing more than 6,850 people.
