Public Power Corp. SA (PPC) rose for the first time in over two weeks in Athens trading after the company agreed on terms of a 960 million-euro ($1.3 billion) bank loan to help it overcome liquidity problems and refinance debt.
Greece’s worsening economic situation combined with a government strategy of using Public Power statements as a vehicle for imposing and collecting a special real-estate levy led to an increase in unpaid bills in the first quarter, the Athens-based company said in a regulatory news filing today.
Unemployment is at a record 21.8 percent high and the Greek economy is set to shrink for a fifth straight year. The government imposed the property levy, which has affected owners of 5 million homes and businesses, in September as part of a package of measures to boost revenue.
Public Power’s liquidity was also hurt by the requirement to pre-finance the cost of supplying electricity to 200,000 customers of alternative-electricity suppliers Hellas Power and Energa, the company said. The Hellenic Transmission System Operator SA suspended the licenses of both companies in January because of unpaid debts.
The syndicated loan will also enable the company to refinance debt that matures in 2012, according to the filing.
Public Power said it expects cash flow to improve in the second quarter given tariff increases, a tax return of 167 million euros, the offsetting of money due to the company from public sector entities and increased revenue from the supply of power to former customers of Hellas Power and Energa.
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