A stong injection of € 357 m ($ 360 m) is helping Greek government finances following a successful secondary offering of shares in Public Power Corporation (PPC), the state electricity monopoly, completed last week. The placement involved 30.6 m of shares, including an over-allotment option of 3.4 m shares, and was oversubscribed six times according to Athens Exchange sources.
The price for retail investors was set at € 12.03 per share – a discount of 3 per cent over last Friday’s closing price – as part of a finance ministry bid to attract small savers back to the Athens Exchange. Analysts said retail investors would take precedence over local institutions in allocating the domestic tranche, which corresponds to 43 per cent of the offering. The final share price for institutional investors was set at € 12.40 per share, at the lower end of the € 11.80 - € 13 offering range.
PPC’s value is now estimated at € 2.7 bn, according to analysts familiar with the offering. The latest PPC disposal reduces the state’s holding in the electricity utility to 71.3 per cent from 84.5 per cent before the latest offering. Deutsche Bank and UBS Warburg were global co-ordinators for the offering. National Bank of Greece and Alpha Finance, the investment banking arm of Greece’s Alpha Bank, coordinated the domestic tranche.
Part of the offering’s success is attributed to PPC’s “safe” position in the local electricity market where it enjoyes a monopoly situation, despite government efforts under European Commission pressure to liberalise the market. Although the government now looks likely to allow new players to build and operate power stations and has already issued six licences, private power generation is unlikely to start before the end of 2005. As a result PPC is unlikely to face any serious competition from other producers in the short term.
C. Stambolis