Greece to issue shares in Public Power Corporation

As part of its market liberalization programme, Greece will float up to 18 per cent of the Public Power Corporation (PPC) in an IPO this December, according to the Finance and Development ministry. The state-owned corporation is responsible for transmission but since February, ceased to hold the monopoly within Greece and its islands for power generation in the country.

The IPO will be open to domestic, international and institutional investors and will involve 35m shares. The float will represent at least 15 per cent of the company, an increase over the ten per cent originally planned. Market capitalisation of the PPC is estimated to be in the region of 1m drachmas ($2.58m).

The ministries said the IPO will involve the issue of up to 23m existing shares held by the Greek State, or about 10 per cent of the company’s share capital.

Another 12m new shares will be offered via a share capital increase, or about 5.0 per cent, while another 1.0 per cent will be provided for a “greenshoe” option. Another 2.0 per cent of the company’s share capital may be offered in case of high demand from holders of Greek state convertible bonds – ‘prometoha’ – wanting to convert them into PPC shares.

The ministry gave no indication of a price range for the offering. The IPO will run from December 4-7 with roadshows beginning on November 26.

Greek retail investors will be able to receive shares at a discount of up to 3.0 per cent and will receive a bonus issue for each ten shares held for at least six months.

The floatation is one of the measures Greece is taking in order to comply with the European Electricity Directive.

The EU Directive requires the separation of PPC’s generation, transmission and distribution operations. It will be divided into four operational companies, and some secondary companies, which will remain vertically integrated under one holding company. The decision to keep DEH vertically integrated was made in order to retain its size financially and to ensure that it remains a main market player.

The PPC is presently constructing two new power plants (a 480 MW plant in Komotini and a 330 MW plant in Florina). Projections indicate that, from 2004 until at least 2010, one new 600 MW plant per year will be needed in Greece.

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