The expectations of high returns from the concession of 49% of the Hellenic Electricity Distribution Network Operator (DEDDIE) were vindicated on Friday upon the unsealing of the financial bids of four investors short-listed at the tender.
Owner Public Power Corporation announced that the top bidder is Spear WTE Investments Sarl, a member of the Macquarie Infrastructure and Real Assets Group (MIRA), with a bid pricing the stake up for grabs at 2.116 billion euros, including pro rata net debts of €804 million.
According to PPC, “the bid points to a valuation that amounts to 151% of the regulated asset base. The final decision will be made by the competent corporate bodies of PPC SA.”
Sources from Greece’s largest utility clarified yesterday that the net amount to enter PPC’s coffers will be €1.3 billion as the rest corresponds to 49% of DEDDIE’s debts, which exceed €1.6 billion in total. That amount of over €800 million, the sources add, will reduce the ratio of net debt to EBITDA below 3, while the fresh liquidity will finance the utility’s renewable energy source plans to speed up the disengagement from imported and polluting forms of energy.
At the same time DEDDIE – with the support and the know-how of an international partner and under PPC management – will develop an extensive program for its modernization and the digitalization of its network, and offer more quality service to all citizens.
The PPC management had informally set a threshold of €1.5 billion for bids, but the highest bid is significantly above that figure, so the recommendation to the extraordinary board meeting of the corporation on Thursday, September 16, is set to be positive.
Energy Minister Kostas Skrekas spoke yesterday of “the highest bid ever offered in a state company privatization process.”
Based on the price offered, the overall valuation of the power grid assets comes to €4.2 billion. In the context of the concession of the 49% stake of DEDDIE, Grant Thornton had recommended to PPC a valuation of €4.863 billion.