June 7, 2018 / 2:07 PM / 16 days ago

UPDATE 2-Greek utility refinances debt ahead of new business plan

* PPC reaches deal with banks to refinance 1.3 bln euro loan

* CEO says terms of refinancing agreement “satisfactory”

* PPC also secures 175 mln euro credit facility to tap if needed

* Utility in final stage of drafting a 5-year business plan

* Shareholders renew CEO term by an overwhelming majority

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* (Adds shareholders vote to renew CEO term)

By Angeliki Koutantou

ATHENS, June 7 (Reuters) - Greek utility Public Power Corp (PPC), hit by unpaid bills during years of austerity, said it has reached a deal to refinance a 1.3 billion euro ($1.5 billion) syndicated loan and is close to finalising a five-year business plan.

The terms of the refinancing agreement with Greek banks were “satisfactory and absolutely reasonable,” PPC’s Chief Executive Manolis Panagiotakis told shareholders at the company’s annual general meeting on Thursday. The loan is due in May 2019.

Shareholders at the meeting voted overwhelmingly to renew Panagiotakis’s tenure as CEO for three years after his term expired in April.

The CEO said PPC, which is 51 percent state-owned, had also agreed a new 175 million euro credit facility with banks, to tap if it needs help to repay outstanding notes of 350 million euros due next year.

PPC’s share price was hit last month after media reported that adviser McKinsey had drafted a five-year business plan that indicated it needed to take immediate action to reduce arrears, boost its profit and cut its workforce.

Panagiotakis said that PPC was in the final stage of drawing up the plan, which will include specific measures to boost the utility’s finances by 2022, upgrade its operations and develop new activities in the next 10 years.

“Specific actions will take place in June to make sure it (the plan) will be implemented,” he said.

Greece’s dominant utility is also selling units equal to about 40 percent of its coal-fired capacity, a condition of Greece’s international bailout, to help open up the sector.

PPC has been hard hit by bad debt provisions for bills left unpaid by Greeks hit by years of austerity and a protracted recession in recent years.

Provisions for the arrears of more than 2.5 billion euros dropped dramatically last year after PPC stepped up efforts to collect them. ($1 = 0.8456 euros) (Reporting by Angeliki Koutantou; Editing by Susan Fenton)

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