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PUBLIC POWER CORPORATION (PPC) | First thoughts: Bigger, longer, structurally stronger

€4bn capital increase to fund step-up in scale – PPC announced a materially more ambitious medium-term plan, effectively resetting its trajectory with a clear step-up in scale and duration. The new framework envisages €24bn of capex over 2026–30 vs €10.1bn over 2026–28 previously, implying €13.9bn incremental investment, while extending the earnings horizon. EBITDA is now set to reach €4.6bn by 2030 vs €2.9bn by 2028 under the prior plan, with net income guided at €1.5bn by 2030 and €1.0bn by 2028. The €4bn capital increase will partially fund this acceleration, alongside operating cash flow and debt capacity, supporting a structurally larger platform across RES, networks, flexibility and new infrastructure verticals. In our view, the scale of the plan reflects both increased visibility on execution and a broader opportunity set, particularly as PPC moves into higher-growth, more capital-intensive segments.

Our take: large raise, but with cornerstone support and underpinned by returns – Admittedly, the c€4bn raise is large relative to PPC’s current market cap (c60%), implying headline dilution of c40%. However, the structure materially de-risks execution, with CVC having committed up to €1.2bn, and the Greek State intending to retain a 33.4% stake (c€1.3bn participation). As such, the free float absorption required from the market narrows to c€1.5bn, which looks more than manageable in our view. Importantly, the capital is deployed into a plan that continues to screen attractively, with 2-digit IRRs across the core business (ex telecoms and regulated distribution) and a clear step-change in earnings. Against that backdrop, we expect strong participation, with investors likely to look through dilution and focus on growth and returns. Moreover, the transaction creates a compelling entry point ahead of Greece’s transition to developed market status. The increase in free float should secure PPC’s inclusion in MSCI Developed Greece, enhancing visibility and broadening the investor base. Overall, the combination of cornerstone support, manageable residual issuance and improved index positioning reinforces our positive stance.

Strategy 2030 centered on 3 key pillars – Management framed its 2030 ambitions around 3 core pillars: 1) Accelerated RES and flexible generation expansion, with total installed capacity set to exceed 24GW by 2030, supported by batteries and new CCGTs, alongside full lignite exit by 2026. 2) Further geographic expansion across CSEE, adding Hungary, Poland and Slovakia to existing markets (Italy, Bulgaria, Croatia), with the vast majority of new capacity in RES, enhancing both growth and portfolio quality. 3) Data centres emerging as a new growth vector, with Kozani Phase I (300MW) embedded in the plan (c€1.2bn capex, c€170m EBITDA run-rate), underpinned by long-term contracted revenues and scalability towards a multi-GW platform. In addition, networks remain a key earnings anchor, with RAB set to expand to €7.3bn by 2030, supporting predictable returns.

Timeline – The capital increase will be executed via issuance of new ordinary shares through a fully marketed, non-preemptive offering, with priority allocation for existing shareholders. An EGM is scheduled for May 14th, with launch and pricing expected by late May.