August 22, 2019 / 1:16 PM / 4 months ago

Incoming Public Power Corp CEO vows to tackle 'dramatic' cash shortfall

ATHENS, Aug 22 (Reuters) - The new head of Greece’s Public Power Corp (PPC) said on Thursday his priority was to tackle a “dramatic” cash shortfall at the state-controlled utility by the end of next year.

PPC is saddled with about 2.5 billion euros ($2.8 billion) in unpaid bills from consumers who missed payments during the country’s debt crisis. It reported a large loss for 2018 which widened in the first quarter of this year.

It faces a cash shortfall of more than 750 million euros in the next 12 months, aggravated by a rise in CO2 prices, Chief Executive Georgios Stassis told reporters after a shareholders’ meeting which approved his appointment.

“During the few days that I have been working with the firm, I have understood that there is an extremely important - a dramatic - cash issue,” Stassis said. “We need to identify actions that will raise more than that - much more - in the next 12 to 18 months.”

Stassis said the measures must be identified by mid-September, before PPC releases its first-half results, and could include changes in pricing, securitising some overdue bills and boosting efforts to collect them.

“It’s not possible that some people are not paying, that this is considered normal practice and that (their electricity) has not been cut,” he said.

Stassis, an engineer and former chief executive at Enel Romania, succeeded Manolis Panagiotakis, who resigned days after a change of government in Athens last month.

In his three-year term, he is also tasked with carrying out a government plan to overhaul PPC, which includes switching from coal to renewables, selling shares in low-voltage distribution networks, and implementing a voluntary redundancy scheme.

Greece also wants to renegotiate an agreement made with its international lenders under its bailout on the market share PPC needs to shed to help open up the sector.

Under the existing terms of the plan, PPC cut its retail market share to 50% by end-2019 from about 70% via power sales to alternative producers at below-cost prices.

Stassis said PPC should seek to retain close to 60% or 65%. “It’s an international practice for a former incumbent utility to end up with such a share.”

$1 = 0.9022 euros Reporting by Angeliki Koutantou Editing by Karolina Tagaris and David Holmes

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