The process for ADMIE’s share capital increase is entering its final stages, as calls with investors continue this week as well, and all signs point to the fact that on June 16, when the book of offers is set to open, both major infrastructure funds and hedge funds will participate, as indicated by discussions to date.
Regarding the offering price, although there are still eight trading sessions remaining before the start of book building, based on the stock’s performance and given that the rights offering will be priced at a small discount to the current price, market sources are discussing a range of €3.7–3.9.
Over the past month, and especially since April 30—when the government paved the way for the rights offering with an amendment in Parliament—the stock has rallied 22%, rising from €3.285 to €4.01 on Friday.
In the wake of the roadshow in London, where the management duo of Yannis Manousakis (ADMIE) and Yannis Karabelas (ADMIE Holdings) presented the investment plan for the coming period, the picture is beginning to take shape, as banking sources report, that two distinct categories of investors will be knocking on the Administrator’s door.
Large long-term infrastructure funds, which hold onto a stock for a long time (e.g., 10–15 years) once they invest, as well as hedge funds that the company aims to attract, in order to ensure the stock has liquidity and to guarantee market activity following the capital increase.
The management’s primary objective, as banking sources explain, is for the company’s new shareholder structure to include not only long-term investors but also a percentage of hedge funds, so that trading can take place and the stock has the necessary liquidity as part of the implementation of ADMIE’s new investment plan, which aims to more than double its regulated asset base—from €3.3 billion by the end of 2025 to approximately €7 billion by 2029.
A common theme in all of management’s contacts so far, however, is reportedly that interlocutors have pointed out that the €250 million ADMIE intends to raise from the market is a very small amount and that they themselves are willing to invest multiples of that figure. At the same time, these discussions are said to have helped raise the company’s profile and establish ADMIE’s growth story as one of the best among European transmission system operators, with its new investment plan projecting an annual profit growth of 25–30% by 2029 thanks to €6 billion in investments.
Key Dates
This week marks the start of the countdown to the rights offering. On Thursday, June 11, the extraordinary General Meeting of ADMIE Holdings will take place; on Monday, June 15, the listed company will announce its quarterly results; and the following day, June 16, the book of offers will open and remain open until Thursday, June 18.
Since, as reported, the €250 million has already been covered based on verbal interest, this means that the total amount of the €1 billion capital increase has also been secured, as the remainder is “locked in” by the Greek State, which holds 51% of ADMIE, and the Chinese shareholder State Grid, which controls 24%.
Currently, the Greek government holds 51% of the Operator’s shares, through DES ADMIE (25.5%) and through ADMIE Holdings (26.1%). This means that the Greek government will contribute a total of 530 million euros, which has been secured through the recent amendment by the Ministry of Environment and Energy, according to which the Recovery Fund will contribute approximately €370 million, with the remainder covered by the DES ADMIE fund, which has approximately €147 million available.
Of the remaining €470 million out of the €1 billion, €240 million will be paid by the Chinese (24%) and €250 million by the market.
According to some scenarios, interest has been expressed by a cornerstone investor to participate in the rights offering; however, the €250 million that ADMIE will raise from the market is quite small and not suitable for such a move, as those in the know explain.
Where will the 1 billion be invested?
The big challenge concerns not only the success of the rights offering, but mainly the day after and the launch of the Operator’s investment plan, with the major island interconnections—as well as the one with Italy—as its crowning achievement.
The recent announcement naming Fulgor and Prysmian as preferred investors for the construction of 150 kV high-voltage cables and alternating current (HVAC) for the interconnections in the Dodecanese and the North Aegean islands, also signals preparations for the post-capital increase phase.
The scope of the tender concerned the conclusion of a six-year framework agreement for the design, supply, and installation of the submarine and underground cables to be used in the interconnection projects of the two island groups, as well as in smaller-scale interconnection projects on the Ionian and Argosaronic islands, with a total maximum budget of €2.07 billion.
These projects, together with their corresponding allocations from European funds, will be financed with the €1 billion capital increase.