A temporary postponement in the bond issuance of GEK Terna amounting to up to 500 million euros was decided a short while ago, according to information from BN.
There was information that the issuance would launch today, but prevailing market conditions led to the postponement.
It should be noted that from the very first moment the issuance was announced, there was concern since government bonds were under pressure, while corporate bonds followed the same trajectory. Thus, analysts were saying that if it entered the markets it would be priced with an interest rate perhaps even above 5%. Today the ten-year bond of France exceeded 5%.
Overall, GEK Terna has troubled investors as on the one hand it emphasizes that it has high liquidity, but on the other hand it moved to issue a bond under such conditions.
The stock, although closing with a marginal rise today, has been under heavy pressure recently. From the 48 euros where it had stood, it has retreated below 39 euros.
Part of the decline is attributed to the fact that although the company claims it has high liquidity and makes extrapolations on debt excluding loans in concessions, shortly after the share capital increase, it had announced the issuance of a new bond loan in order to repay an old one.
Total borrowing is nevertheless high and has affected the trajectory of the stock.
How is the borrowing of the GEK Terna group structured?
1) Letters of guarantee of 1.9 billion euros (written commitment of banks)
2) New loan for the Northern Road Axis of Crete of 1.4 billion
3) Loan for Attiki Odos of 2.60 billion euros
3) Loan for Egnatia Odos of 1.039 billion euros
4) Loan for Nea Kentriki Odos of 391 million euros
5) Kastelli, Public-Private Partnerships (PPPs) in water supply, waste, HERON, TERNA construction, other operating activities... loans amounting to 644 million euros
6) Parent company loans of 1.345 billion euros
Sum of loans 9.3 billion euros
Non-consolidated holdings are not included in this analysis, as in that case borrowing increases even further.
The 4.1 billion of GEK Terna borrowing in misinformation press releases... in practice is 9.3 billion euros.
Why is a new bond needed?
The most basic question is reasonable.
Why would GEK Terna seek new capital through a bond issuance? Is it facing cash flow pressures due to the increased requirements of the projects it implements, or is it a move of refinancing and managing its debt?
And, above all, is additional borrowing the appropriate solution when the investment program constantly demands fresh capital?
It is recalled that in 2025 GEK Terna had proceeded with a bond loan issuance of up to 500 million euros.
If it is now considering a new issuance, the management must explain what need is being met, where the new capital will be directed, and whether this financing enhances the group's financial flexibility or further increases its debt liabilities.
Giorgos Katikas
www.bankingnews.gr
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