May 15 (Bloomberg) -- Greece released plans to restructure state-controlled Public Power Corp SA, the country’s largest electricity producer, before a sale of a 17 percent stake, to meet conditions for international aid.
“This is a very important chapter in the liberalization of the energy market so that we increase its competitiveness and efficiency,” government spokesman Simos Kedikoglou said in comments broadcast live on state-run NET TV.
The three-step plan will begin with the sale this year to a strategic investor of a stake of as much as 49 percent in Admie, Greece’s power transmission operator owned by PPC, according to Kedikoglou.
Greek Prime Minister Antonis Samaras’s government has pledged to speed up state asset sales, a key plank in cutting the country’s debt, which sparked the euro area debt crisis in 2009 and prompted pledges of 240 billion euros ($309 billion) in aid from the euro area and the International Monetary Fund. To keep funds flowing, the government needs to meet commitments ranging from selling state assets to opening up closed professions.
Greece will also carve out a “competitive and viable” power company from PPC that will have around 30 percent of its current total production capacity, Kedikoglou said. The exact amount will be decided with the European Commission by the end of June. The final stage involves the sale of a 17 percent stake in PPC to a strategic investor by the first quarter of 2016 at the latest which will leave the state with a 34 percent holding, the Athens-based Energy Ministry said in an e-mailed statement.
Shares of Public Power rose as much as 6.9 percent to 8.39 euros and were rising 39 cents to 8.24 euros at 13.29 p.m. in Athens, heading for the highest close in almost three months.
“It’s positive that the government has committed to a timetable, which although extends to 2015, should help the stock crystalize value,” said George Doukas, an analyst at Piraeus Securities SA in Athens. The question that remains is whether PPC will get any cash for the spinoffs and whether the valuation will be fair, he said.
The investor in Admie will have a contractual obligation to increase the stake in 2014 to at least 51 percent while the Greek state will maintain a minority holding, Kedikoglou said. This additional state sale is scheduled to be completed by the end of the second quarter next year, he said. While independent in terms of management and operation, Admie is a wholly-owned unit of PPC.
The plan contains provisions for the new power company to withdraw from a number of lignite coal, natural gas and hydro-powered production units currently operated by PPC while the new entity will have access to PPC’s lignite reserves and mines, the Energy Ministry said. This second stage of the plan is due to be completed by the end of the first quarter of 2015, according to the statement.