With the file regarding GEK TERNA remaining with the European Public Prosecutor's Office for investigation concerning concessions, and with investor concerns heightening as GEK TERNA is valued at a P/E ratio of 32 that is extremely unjustified; a new parameter comes to be added regarding GEK TERNA.
According to information, the SSM at an unsuspecting moment categorized the exposure of Greek banks to GEK TERNA with €4.3 billion in loans as high risk. The position of the SSM is not formal but substantive, as the competent body for banking supervision—the Supervisory Board of the ECB—evaluates all potential risks. In its report, the SSM focuses on two Greek companies that it considers high risk, and one of these is GEK TERNA.
Let us examine the data
GEK TERNA has entered into loans of €4.3 billion and carries a burdened past of excessive debt, both as a group and regarding Giorgos Peristeris himself, head of the group and principal shareholder. Following the sale of TERNA Energy, which was a necessity to address the impasse of the principal shareholder. GEK TERNA continues with the same policy of high leverage. It is unthinkable for a company with a market capitalization of €5.1 billion to hold loans of €4.3 billion.
In the view of many, GEK TERNA stock is a bubble, manipulated by reports like those from Santander, which suddenly receive business from GEK TERNA, and naturally through a peculiar relationship and osmosis of Giorgos Peristeris with the Government and Minister Gerapetritis. The core issue here is how GEK TERNA has secured all concessions for major motorways, how all of this connects to the government, and simultaneously how an investor can feel confident about the future of a company with extremely high leverage.
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