The completion of the agreement for the acquisition of all the activities of the Italian company Enel in Romania PPC announced today, speaking of a milestone in its development strategy in the field of renewable energy sources as well as in its electricity distribution and trading activities.

This is the first move to expand the business abroad, which has wider strategic importance for the country, especially after the withdrawal, during the economic crisis, of Greek banks from their investments in the Balkans.

“After a decade in which Greek companies were forced to divest from important and profitable assets in order to survive in Greece in the midst of an economic crisis, PPC is the first company to reopen the way for a dynamic entry into SE Europe. In addition, it gives a geopolitical advantage to Greece as it will manage a large part of the energy resources and transmission networks in the wider region”, PPC circles report in this regard.

The price of the acquisition was agreed at 1.26 billion euros while the total value is 1.9 billion (the difference is debt assumed by PPC). It will be financed with equity and borrowing, (a 5-year loan of 800 million euros has already been secured from Greek and international banks).

The President and CEO of PPC, George Stassis stated: “This acquisition is fully consistent with what we presented in November 2021 as part of our strategic plan, which envisaged our international expansion in the South East Europe region, and therefore Enel’s activities in Romania are the ideal choice both both geographically and from a business point of view. This is a unique opportunity to acquire a vertically integrated energy company with an attractive valuation, setting in motion the transformation of D.E.H. to a leading clean energy company in Southeast Europe. We are confident that this important development will contribute to the development and improvement of D.E.H.’s competitiveness. both internationally and domestically, benefiting our customers and ultimately creating value for all our stakeholders.”

“With the acquisition of Enel Romania, PPC strengthens its position in the wider region and becomes the largest player in SE Europe. It also gets direct access to renewable energy sources resulting in cheaper production costs. It essentially doubles its production from RES (excluding large hydroelectric plants).

It faces regulatory risk from the restrictions imposed on it in Greece, where it is obliged to reduce its market share. In this way it maintains and increases its size. Finally, with this move, it implements its investment plan as it was actually presented to investors before the successful Share Capital Increase in November 2021″, PPC circles report.

The activities of Enel Romania which is the largest renewable energy company and the second in the supply and distribution of electricity in the country include:

  • Distribution network of over 130,000 km, distributing approximately 16 TWh to the areas of Bucharest, Banat where the country’s industrial zone is located and the tourist area of ​​Dobrogea.
  • Major Renewable Energy projects (534MW RES in operation: 8 wind farms with an installed capacity of 499MW and 4 photovoltaic parks with an installed capacity of 36MW and 5.4GW projects in various stages of development.
  • The supply companies Enel Energie Muntenia and Enel Energie, with 3.2 million customers and sales of 11 TWh. Also Enel-X, a value-added services company, such as the development of an electrification network, maintenance services, etc.

It is also noted that the acquisition price is lower than similar transactions recently made for acquisitions of networks, RES and supply activities in Greece. The agreement also provides for a possible additional payment, in the event that Enel Romania’s Trading activity acquires additional value in the next 2 years.

The transaction will add operating profits (EBITDA) of the order of 300 million euros to the total EBITDA of the PPC Group, while the synergies that will be created are of the order of 200-250 million euros over a 4-year horizon.

Finally, it is pointed out that the Italian parent Enel is in the process of disinvestment from various countries as the international energy crisis found it with very high debt.

It has already sold operations in Chile, and Russia, and is in the process of selling both the Romanian operation as well as Greece, Argentina and Peru. On the contrary, PPC has managed to clean up its finances and look for investment opportunities, in accordance with the plan for which it committed itself to the international investment community during the Share Capital Increase.