Greece, lenders clinch deal on power grid operator, sources say

11 December 2015
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Greece and its lenders agreed on how to split off the country’s power grid operator from dominant power utility PPC, two government sources said on Friday, part of a set of reforms that needed for Athens to receive fresh bailout aid.

Prime Minister Alexis Tsipras’ leftist government halted the sale of a 66 percent stake in grid operator ADMIE after winning election in January. It agreed under a third bailout deal signed in August to either restart the tender or find alternative ways to open up the electricity market.

Under the deal, the state will take a stake of least 51 percent in the operator (ADMIE), which is now fully owned by PPC, and the rest will be privatized, one of the sources said. PPC itself is 51 percent state-owned.

“We are already achieving significant victories in this hard negotiation with our lenders like the one we achieved yesterday by keeping ADMIE in state hands,” Tsipras told parliament.

A 20-percent stake in the grid operator will be sold to a private investor and 29 percent will be floated on the Athens stock exchange, a senior energy ministry official said.

“The new power transmission operator will belong to the Greek state as has been the case so far with a stake of at least 51 percent,” the official said on condition of anonymity.

“We are open and we will try to have a European electricity transmission operator also participating as a minority shareholder.”

ADMIE has a book value of about 900 million euros ($985.05 million) and Greece will appoint an independent evaluator to assess the price it has to pay to PPC for the majority stake. The sources did not say how the cash-strapped government would pay.
The mission chiefs of the European Commission, the IMF, the ECB and the euro zone’s ESM bailout fund are in Athens for talks on a second set of measures Greece must enact to qualify for 1 billion euros by the end of the month.

The two sides are still discussing how to deal with banks’ bad loans and the structure of a new privatization fund whose revenues will be used to cut Greece’s debt and boost investment.
Athens is struggling to keep non-performing loans to small business and consumers out of the clutches of so-called vulture funds that buy loan books of distressed debt at a discount and try to recover the money.

Talks are expected to wrap up late on Friday so the EU and IMF mission chiefs can report back to their institutions, another government official said. The government aims to secure parliament approval for this set of reforms next week to get the 1 billion euro tranche by December 18.

It will then have to pass other reforms, including a major restructuring of the ailing pension system, to conclude its first bailout review and open talks for a debt relief.

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