ECONOMY

PPC ready to float

The scheduled listing on the Athens Stock Exchange (ASE) next month of the Public Power Corporation (PPC) – still the effective monopoly in electricity production despite the formal deregulation of the power market early this year – is attracting strong interest, especially with respect to its possible role as a catalyst for further major developments in the industry. The drive to prepare the corporation for its part-privatization is already credited with leading to its restructuring and streamlining. The question now emerging is whether the completion of the plan will also speed up the restructuring of the country’s entire power market. The continued dominance by the PPC – one of the biggest power producers in the Balkans – of the domestic market is taken for granted for a good number of years into the future. Its geographical position in relation to the markets of neighboring countries that have an energy deficit exercises a strong pull on the big European electricity companies which have included these countries in their strategic plans. Market experts are certain that France’s EdF and Italy’s ENEL conglomerates will knock on PPC’s door for a strategic partnership that will pave the way for their expansion in the Balkans. Indeed, officials say that interest has already been expressed but the corporation’s streamlining and its listing on the bourse which provide a basis for its stock market value have to take precedence. For its part, PPC seems ready to discuss proposals by interested investors, having realized that it must strengthen its position in a growing single European market. Besides, the big European electricity companies pose the only real threat to PPC, as investment in electricity production is capital-intensive, yields long-term returns, requires huge funds and concerns a product in a class of its own that cannot be stored. The low sale price of electricity and the relatively expensive raw material raise serious questions over energy producers’ viability and their financing by banks, which explains the current stalling of the private production schemes that were given licenses in February. Consequently, PPC has realistically opted for an alliance with European giants instead of competing with them, which would bar its expansion into promising neighboring markets. On Thursday, the board of directors approved the prospectus for the listing of the corporation and a broad meeting is scheduled for Friday under Economy and Finance Minister Nikos Christodoulakis to adopt definitive decisions. The public offering has been slated for December 4-7, for a 10-12 percent of PPC’s existing share capital. The government expects to receive about 170 billion drachmas, of which 90 billion will be earmarked in the 2002 budget for the workers’ social security fund, whose huge 3.2-trillion-drachma obligations posed the main stumbling block towards PPC’s privatization. PPC reported a 1.9-billion-drachma profit in 2000, which is expected to grow to more than 100 billion this year. -Economy and Finance Minister Nikos Christodoulakis to chair a broad meeting on the part-privatization of the Public Power Corporation (PPC). Development Minister Akis Tsochadzopoulos to confer with PPC officials.