PPC’s entry into the Balkans has been the longing desire of the entire management of the company for the past nearly 20 years. In addition, cross-border development has been a one-way street for all of Europe’s national electricity monopolies, which, with the opening of the market in the late 1990s, had to free up space at their internal borders. So the former state monopolies of Germany, France and other European countries dominated the European market and the Balkans, and so the Italian state monopoly Enel was founded, which has become one of the largest multinational corporations in the renewable energy sector in the world. in 2005 in Romania.

At the time, the PPC was still fighting in the trenches to maintain its monopoly by outsourcing its vital area of ​​expansion, the Balkan market, to its competitors. When it first tried its hand in the Bulgarian market in 2005 and then in Kosovo, North Macedonia and Albania, the path was not easy, as its competitors strengthened their positions, as a result of which all attempts were crowned with failure. The exception is the acquisition of a small trading company in Skopje, EDS, in 2018, which was mainly the result of political processes under the Prespa Agreement.

The energy transition of the Balkan countries has created a new field of activity, which the current administration of the PPC also aspired to. However, the energy crisis came, which turned all precedents and gave the CPT an opportunity to take a step that it did not take nearly two decades ago. Put your foot on one of the largest and most emerging markets in the Balkans with a vertically integrated presence. Romania is a country with 22 million inhabitants and the same electricity consumption as Greece. PPC, thanks to an agreement signed last week with Enel to acquire its entire portfolio in Romania, is becoming the largest player in the field of renewable energy and the second in the field of electricity supply and distribution. At the same time, it becomes a strategic energy player in the region and gains access to an energy corridor that starts in Romania, crosses Bulgaria and ends in Greece.

PPC, under the agreement, becomes the largest player in the field of renewable energy in Romania and the second in the field of electricity supply and distribution.

Enel is leaving Romania as part of a restructuring of its global portfolio, which includes the withdrawal of investments from certain countries and strengthening its position in higher growth countries where it has an integrated presence, namely Italy, Spain, the USA, Brazil, Chile and Colombia. By selling assets in Romania, Argentina, Peru and Greece, the company aims to reduce its debt, which has increased significantly during the energy crisis, by 21 billion euros by 2024. For PPC, which managed to recover, Enel’s portfolio in Romania was unique. the ability to increase its size and face regulatory risk due to restrictions placed on it in order to reduce its domestic market share. In Enel’s tender for the sale of its Romanian subsidiary, PPC had a strategic advantage over its competitors. Mr. Yorgos Stasis knew both the company and the market very well, having served as Managing Director at Enel Romania until he took over PPC in the summer of 2019. Thus, in November, an agreement on exclusive negotiations between the two companies was closed, and last Thursday a binding agreement was signed to acquire Enel Romania. With the completion of the acquisition in the third quarter of this year, PPC will add more than 130,000 km of distribution network, an additional 3.2 million new customers and 534 MW of existing renewables to its potential.

The deal, according to PPC circles, will add EBITDA of around 300 million euros to the total EBITDA of the PPC group, and the synergy that will be created will be in the order of 200-250 million euros over 4 years. horizon. PPC EBITDA increases by 30% from 900 million euros to 1.2 billion euros, while net debt with the acquisition of Enel Romania increases from 1.4 billion euros to 2.4.

The price that PPC will pay is approximately €1.260 billion (based on a total business value of €1.9 billion). The agreement includes a provision for a possible additional payment (Earn-out) based on a certain mechanism in case the value of Enel Romania’s trading activity exceeds the amount included in the remuneration of 66.5 euros per client over the next 2 years. .

PPC intends to finance the acquisition through a combination of debt and equity on its balance sheet, of which €800m will come from debt financing already secured, available in the form of a €485m 5-year loan from Greek banks, as well as a bridge facility. of 315 million from international banks.