Payment terms were at 30 days, but due to the Greek crisis which also affects the relevant authority payments are now pushed back to c. 6 months Manufacturer/type of turbines? Enercon and Vestas, with an average age of 3-4 years. These turbines come with performance guarantees from the manufacturer (taking into account wind data) WA PPA of 21.6yrs – who is the counterparty to these contracts? Are these contracts totally fixed or any variable element? The counterparty is the Greek Government, through the renewables authority. The contracts to date have been under a FiT regime, which is now moving to FiP. How are the assets financed – matched to PPA? Is there a perceived risk that high returns could be retroactively amended as in, for example, Spain and Italy? There is no perceived risk that returns can be retroactively amended, as this happened once in the past. Financing is not perfectly matched to PPAs, and the company pays down debt through its cash generation. Pipeline of 775mw – what is the status of this pipeline? Have PPA’s been agreed , connections agreed, turbines ordered etc? 250MW has been fully funded and in the construction phase with a PPA in place at a 15% IRR. The rest is still in the planning stage.
PANARAE Page | 9 What are the key risks to building out the portfolio? How can the Company be certain that tariffs/prices/PPA terms/taxes will not be changed as in other European jurisdictions? Assume the target of 20%/40% energy consumption/electricity can be over-turned at anytime or purely missed and is therefore less of a driver versus cheapest cost of energy delivery? We are getting additional input on this, however, a narrower than 15% IRR is possible going forward. As aforementioned, very limited risk assigned on retroactive changes in tariffs etc. Financials Balance sheet net assets of 985.1m, but that is driven by a huge intangibles number – what is that – Will the business turn cash flow positive in ’16 results? The Balance Sheet as of 30/06/2016 includes intangibles of €663 millio n that include the Attiki Odos concession right (€402.8 million) and the Moreas concession rights (€235.6 million). Just to clarify, in a concession the investor undertake to construct the assets but the investor does not own the road but has the “right” to operate and exploit the assets for the tenor of the concession. The value of this right is reflected in intangible assets. For more information please refer to note 6b of the 30/06/2016 financial statements. Does the business need to keep high cash balances with Greek banks – in particular restricted cash? Because of the Greek crisis and the lack of liquidity in Greece, the Ellaktor Group has kept higher levels of liquidity (as a safety cushion) over the last few years. Since December 2014 when the risk of capital controls and potential bail in increased we reduced our cash balances by: Debt repayments (ie in Attiki Odos) Diversifying part of liquidity to other liquid assets (ie AAA rated, highly liquid bonds classified in our financial statements as financial assets held to maturity) Moving some cash balances to international bank accounts
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- Spring '15
- Finance, Hellenic Republic, Attiki Odos, Attiki Odos concession