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Greek banks concerned over PPC's power grid spin-off scheme
January 13, 2017 / 4:43 PM / a year ago

Greek banks concerned over PPC's power grid spin-off scheme

ATHENS, Jan 13 (Reuters) - 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 Corp. (PPC).

Under a legislated scheme, PPC will sell a 24 percent stake in ADMIE to China’s State Grid for 320 million euros ($340 million) and transfer another 51 percent stake to the state and its current private shareholders for free.

But banks which have extended sizeable 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 cancelling loans to PPC,” the banker added.

A Greek government official confirmed that Greece’s four biggest banks had sent a letter to the finance ministry, copying PPC management, outlining their concerns over the issue.

PPC declined to comment.

PPC shareholders had been due to approve the transfer of the 51 percent ADMIE stake on Thursday but the meeting was postponed until Jan. 17 after a request by the Greek privatisation agency, one of PPC’s main shareholders.

Greece has to conclude ADMIE’s plan by March or fully privatise the grid, a possibility which PPC’s chairman has ruled out. ($1 = 0.9415 euros) (Reporting by Angeliki Koutantou and George Georgiopoulos; Editing by Adrian Croft)

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