Greek PPC: What the deal with Enel for Romanian assets mean for the company and Greece

PPC grows with the acquisition of Enel’s holdings in Romania.

The Greek company in its more than 70-year history crosses the country’s borders for the first time, expanding its energy and customer portfolio. It is placed in a geostrategic position in the region of Southeast Europe and in a period in which the security of energy supply plays an important role. The war in Ukraine and the disconnection of countries from Russia’s natural gas and oil creates a great need for countries to look for alternative sources of energy.

Given that PPC is under the control of the Greek government, its entry into the Romania-Bulgaria-Greece energy corridor puts the country in a leading role in the management of energy resources.

The analysts

Yesterday afternoon the president and CEO of PPC Giorgos Stassis informed the institutional investors and analysts about the acquisition, estimating the completion of the transaction with Enel after the summer.

170 people took part in the teleconference and Mr. Stassis assured, among other things:

For the continuation of investments in Greece. “We have the funding and a very strong project pipeline,” he said. He described the valuation of the acquisition of Enel Romania as “fair”. He highlighted the acquisition of electricity distribution networks, recalling that it is not easy to find a seller of such infrastructure in the European market. He emphasized that “the risk is controllable as the two markets are similar” and cited the reports of international financial houses.

Assets and companies

With the acquisition of Enel’s holdings in Romanian companies, PPC becomes a shareholder with a majority stake in the three electricity distribution companies:

E-distributie Muntenia with 78%. The remaining percentages are held by the country’s companies FONDUL PROPRIETATEA with 12% and SAPE with 10%. This company electrifies the Muntenia region, including Bucharest.
E-distributie Banat with 51%. The two aforementioned companies are also shareholders with 24.1% and 24.9%, respectively. The company electrifies the area of the same name, which has an industrial zone.
E-Distribute Dobrogea. PPC will control 51% and the other two shareholders – the same in the previous electricity distribution companies – own 24.1% and 24.9%. The company electrifies the tourist region of Romania.

These are three areas of critical importance for Romania’s economy. The power distribution network extends over 132,353 kilometers and 16 TWh of power is distributed. The regulated asset base of all three is at 1.15 billion. euro.

The Greek company also becomes a shareholder with majority stakes in three electricity supply companies that gather 3.2 million customers:

Enel Energie Muntenia with 78%. The other two shareholders are FONDUL PROPRIETATEA with 12% and SAPE with 10%.
Enel Energie with 51%. The other aforementioned shareholders are again the same and hold 12% and 37% respectively.
Enel-X with 100%. This is the company that is active in electrification and energy efficiency.
Also, PPC becomes the sole shareholder with 100% of Enel with its RES activities.

The company owns 8 wind farms with a capacity of 499 MW and 4 solar farms with a capacity of 36 MW. These are projects that are in operation.

It also has a project portfolio of 5.1 GW in various stages of development

PPC, with the acquisition of the aforementioned holdings and assets, becomes in Romania the second player in electricity distribution, the first in RES and the first electricity supplier.

The financial figures

The Greek company increases its asset base by 40%.

With the acquisition of the three electricity distribution companies from the 3 billion increases to 4.15 billion. euro.

In the supply of electricity, it increases its customer base by 56%, and specifically measures 8.9 million from the 5.7 million it had in Greece.

It has at its disposal RES projects and hydroelectric plants with a total capacity of 4 GW out of 3.5 GW. Increases her installed power by 14%.

The portfolio of renewable energy and hydroelectric project licenses rises by 50% from 10 to 15 GW.

Much of the EBITDA goes green thus strengthening its ESG profile.

PPC’s EBITDA increased by 30% and rose from 900 million euros to 1.2 billion. euros, while the net debt with the acquisition of Enel Romania rises to 2.4 from 1.4 billion. euro.

Greece

By placing PPC in Romania, Greece acquires a strong geostrategic presence in a Balkan country that is adjacent to Central Europe and Eastern Europe. The entry of PPC also serves the goals of Greek foreign policy and diplomatic economy.

Also Greece is thus dynamically placedin the so-called Southern Energy Corridor. The electricity distribution networks of European countries are interconnected. As are natural gas pipelines. The transfer of quantities of energy either in electricity or in natural gas from sources through Greece to the Balkan and Eastern European states is of critical importance for weaning ourselves off Russian fuel.