The critical G.S. of GEK TERNA and the hidden goodwill

By Eleni Botas

The market is focused on the call of the GEK bondholders, which is scheduled for Monday, June 27.

Subject, the “consent to the use of net proceeds from the sale of an excluded asset”, which is estimated to be related to the interest shown for Terna Energy.

Terna Energy has received the interest of large international investors, who are interested in entering its share capital as it is the largest investor in the field of Renewable Energy Sources in Greece, but also the largest Greek company in the industry internationally.

Market participants estimate that a possible entry of an international investor in Terna Energy will have immediate benefits for GEK TERNA, which maintains a percentage of 37.93% in the share capital of the former.

According to estimates by market executives, the benefit that GEK TERNA could obtain is in the range of 800 million euros to 1 billion euros.

This frees up forces, both through the reduction of the Group’s net debt and the further securing of large projects that are expected to be auctioned in the coming years in our country, totaling 43 billion euros, a sector in which it already maintains a leading position.

GEK TERNA is one of the largest construction groups in the country, which plays a leading role both in the sector of infrastructure and concessions, with outstanding that in the next period will be 4.9 billion euros.

One of the biggest projects in which he will be included in the next period in his portfolio is the granting of the right to use and exploit the Egnatia Odos highway and its three vertical road axes for a period of 35 years. The binding offer amounted to 1.496 million euros.

The undertaking of the concession of Egnatia Odos marks an extremely positive and many important development, with a number of benefits for the group and its shareholders.

This is because the GEK Terna group includes in its ever-expanding portfolio of concessions the largest highway in the country and one of the largest in Europe, with a total length (including the three vertical roads) of 883 km.

The total portfolio of highways of the GEK Terna group will now exceed 1,500 km, as the group also owns 100% of Nea Odos, 100% of Central Road and 17% of Olympia Road. It is the largest portfolio of highways in the country and one of the largest in Europe.

The portfolio of concessions of the group also contains other important infrastructures, such as the project of design, construction and management of the new International Airport of Heraklion Crete in Kastelli, waste management projects (PPP of Epirus and PPP of Peloponnese) etc.

At the same time, the group participates in the scheme that will develop and manage the integrated tourist complex with casino (IRC – Integrated Resort Casino) in Elliniko, while claiming with claims other important PPP projects and concessions.

It should be noted that in 2021 in terms of results, the turnover from the construction activity of the Group, amounted to 600.6 million euros compared to 525.9 million euros in 2020 and is increased by 14.2%. The increase in turnover is due almost entirely to the construction activity from the development of new wind farms, as well as the construction of waste management units in the Peloponnese.

EBITDA plus non-cash income included (adjusted EBITDA), amounted to 52.8 million euros compared to 19.0 million euros in the corresponding period of 2020 and is increased by 177%, due to increased revenue and improvement the profit margin of ongoing projects.