ATHENS, April 20 Greece's biggest power utility
PPC said on Friday it would sign a 960 million euro bank loan
next month to cope with a liquidity crunch caused by
austerity-hit customers dodging their electricity bills.
The move will allow state-run PPC to refinance a
large chunk of 1.12 billion euros ($1.12 billion) of debt
expiring later this year as it struggles with record losses,
higher fuel costs and poorer consumers.
"The board of directors has ... approved the terms of a
syndicated loan of an amount of 960 million euros," the company
said in regulatory filing. It did not provide further details. A
company official said the loan would be sealed in May.
PPC's shares were up 4.8 percent at 1015 GMT in Athens,
outperforming a 0.5 percent rise in the general bourse index
PPC already struggles with stagnating power demand and
higher fuel costs. But its problems were aggravated when the
cash-strapped government decided to use the company as a tax
collection vehicle to meet its revenue targets under an EU/IMF
bailout, bypassing its own inefficient tax officials.
In September the state started collecting a 1.7 billion euro
property tax through electricity bills, threatening to cut the
power of households and firms who failed to comply.
Non-payment has nevertheless soared since January, as the
economic crisis deepened and public outcry against the move
forced the government to soften its stance, restraining PPC from
cutting dodgers' power and giving them more time to pay.
The government's back-pedalling "led to a sharp reduction of
power cuts in the first quarter and in turn, to the increase in
overdues," PPC said without giving details.
PPC had said in December, before the government softened its
stance, that bill collection was going smoothly.
The company said on Friday it expected to overcome its
liquidity shortfall later this year, helped by the bank loan and
electricity price increases that took effect in January.
Earlier this year PPC also won back about 200,000 clients it
had lost to two smaller, alternative power retailers that went
bust due to the crisis.
As a result, PPC again controls almost 100 percent of the
country's retail market for electricity. In the wholesale
segment PPC's market share has declined to 75 percent after
other energy companies such as Hellenic Petroleum and
Mytilineos set up their own power plants.
($1 = 0.7609 euros)
(Reporting by Harry Papachristou; Editing by Helen