BUSINESS

Greek banks concerned over ADMIE spin-off plan

TAGS: Privatizations, Banking

Greece’s four biggest lenders are concerned about the spin-off of the country’s power grid operator ADMIE, a key condition of a bailout agreement between Athens and its official creditors, a banker and a government official said on Friday.

ADMIE is fully owned by Greece’s state-controlled electricity utility Public Power Corporation (PPC).

Under a legislated scheme, PPC will sell a 24 percent stake in ADMIE to China’s State Grid for 320 million euros and transfer another 51 percent stake to the state and its current private shareholders for free.

But banks which have extended sizable loans to PPC sent a letter to the Finance Ministry this week, expressing worries over the plan.

“In their letter, they point out their concerns on the sale of a large stake in power grid ADMIE without any proceeds,” said a banker at one of the country’s biggest lenders, speaking on condition of anonymity.

Banks say this weakens PPC’s finances, which have been under pressure in recent years due to provisions for bills left unpaid by customers hit by years of economic crisis, the banker added.

“It is an expression of their concerns as creditors, seeking to protect their interests. As creditors they have a say but there is no issue of canceling loans to PPC,” the banker added.

[Reuters]

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