A shift by Greece's Public Power Company (PPC) away from coal-powered electricity to renewable energy sources has drawn strong interest from investors and sent its share to a 52-week high on the Athens bourse.
The state-controlled company is working on a new operational plan, that will be unveiled on January 16, centering on green energy. The plan will then be presented to institutional investors in the last ten days of the month.
Improving prospects in the company, along with a radical reorganization and change in business priorities, has been driving its shares significantly higher in recent weeks. The stocks are trading at a year-high, having added more than 134 percent higher since the start of the year.
The company's shift to renewable power is the key change that has drawn investors.
According to sources, PPC has received more than 10 offers, from companies such as Italy's Enel, Germany's RWE, France's EDF, and several Chinese players, to work together. It remains to be seen which one of those proposals may be accepted by PPC, but what is certain is that the company is being favorably looked upon for two reasons:
- Due to its size, PPC will play a crucial role in Greece's developing renewable energy market that will consist of direct agreements with the industrial sector and energy suppliers.
- PPC has a strong brand name, particularly in rural Greece. The loss of customers to competitors has been greater for PPC in cities, whereas in smaller towns and villages, PPC has a stronger market position. This could help temper opposition to new RES projects from locals.
The switch to green power and the approval given by the market was confirmed at a recent business conference in Shanghai where the majority of proposals accepted by the PPC related to jointly setting up all types of renewable power projects, ranging from wind parks to creating biomass energy, along with finance, in the case of projects backed by Chinese banks.
The same thing has happened at a recent roadshow organized by Hellenic Exchanges in London, where fund managers indicated that if PPC does not lead the way in environmentally friendly energy, then Greece won't be able to play a key role in this sector.
Consequently, the market is waiting for the new targets PPC will outline in its updated Business Plan that is being put together with McKinsey - a roadmap that will include more ambitious goals than last year's version.
One key area of interest is the headcount reduction PPC intends to move ahead with, a scheme that will be funded by the company's resources. This is likely to affect 4,389 employees working at PPC's lignite plants and mines that will be gradually shut down.
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