METKA is being transformed from a construction company into an integrated infrastructure platform as the sector’s business model changes.
At the same time, the METLEN subsidiary is preparing to list on the stock exchange in the coming weeks.
Market sources say the public offering is expected to take place by December, probably in the last days of November. The stake to be offered is also estimated to range from 25% to 30% of the company, which has a total valuation of around €1.1bn-€1.2bn.
Speaking at an event yesterday on METKA’s growth, Evangelos Mytilineos, executive chairman of METLEN, discussed METKA’s history, its future and the changing business model in the sector.
“Class 7, Class 6 and other companies that have the capability to meet the demands of the new model will survive and do very well. That is because there is an endless amount of work, and the need for construction projects in Greece and the wider region is boundless — you just have to be keen to take on the work,” he said.
He went on to discuss the company’s progress as part of the METLEN group.
“Are there many companies in Greece that have achieved revenue of €1bn and EBITDA of €150m in three years? You might say that reflects on METLEN. It does reflect on METLEN to a point. But it was METKA’s people who put in the sweat and blood. METLEN was always there to help. And I was the first to help. But the sweat and blood were here. Let’s be clear about that,” he added.
Why do we need an infrastructure platform?
Dinos Benroubi, vice-chairman and CEO of METKA SA, spoke about the changes taking place in the sector, asking: Why do we need an integrated infrastructure platform?
“In my view, the major change in the infrastructure market is that the future no longer lies solely in construction. It lies increasingly in an integrated model that includes investment, financing, construction, operation and maintenance of projects. An integrated platform has a major advantage in this model. When we take part in a PPP, we are not simply a financial investor or a fund entirely dependent on the contractor,” he said.
He went on to stress that “we are not simply a contractor that delivers a project and walks away. We stay on to operate and maintain it. When you know you will be responsible for operating a park for 20-25 years, you design it to meet your own standards and requirements, rather than merely the minimum specifications set out in the rules.”
In turn, Evangelos Chrysafis, chairman of the board of METKA SA and vice-chairman of METLEN, stressed that for many years, discussion of infrastructure in Greece had focused mainly on public works. That model, however, is changing — not because the state has lost interest in infrastructure, but because the resources required are now so substantial that the public sector cannot provide them alone.
Greece has left the difficult years behind and made use of funds from the Recovery and Resilience Facility, but infrastructure needs remain a constantly evolving reality.
As he explained, if one considers the country’s growth prospects, which are expected to exceed the European average, it becomes clear that the stronger economic growth is, the greater the need for new infrastructure.
According to the figures he presented, the market includes PPP projects worth around €3.3bn and concession projects worth around €2bn.
Together, these represent a market worth around €5.3bn, in which the financing capacity of companies operating in the sector is particularly important.
How METKA was acquired
At an event that included several references to METKA’s history, Mr Mytilineos also recounted how the company was acquired, going back to the autumn of 1997. By then, Mytilineos had already made its stock market debut, having listed on the Athens Stock Exchange a year earlier, in 1996.
As he recalled, the company had a market capitalisation of around 400m drachmas at the time, while he had major ambitions for its growth.
METKA’s story began with a chance encounter. A journalist friend told him that Spyros Bellos, whom he described as a “guru” of the stock market, wanted to meet him.
Spyros Bellos suggested that he look into METKA, a company whose share price was falling at the time. His advice was to proceed discreetly and not make his intentions public.
Share purchases began gradually. In the summer of 1998, Russia’s default and the ensuing market turmoil brought a large supply of shares, and the process of building a stake continued.
Mr Mytilineos recalled that he was in the Ionian when he received calls from Mr Bellos, and that he eventually managed to build a 25% stake in METKA.
The company’s majority shareholder at the time, Alexandros Koukoullis, who held a stake of around 22%, then invited him to a meeting, saying he wanted to meet him. The share price, he said, had already risen sharply, from 1,400 to 10,000 drachmas.
Mr Mytilineos then proposed that Mr Koukoullis transfer his shares to him, and the price sought was 10,000 drachmas, according to his account. The acquisition of Mr Koukoullis’s stake was completed, but at a final price of 12,000 drachmas.
“We won’t fall out over that,” Mr Mytilineos replied.
The chairman also highlighted METKA’s significant industrial and technological advantages.
The company had established a strong presence in building pylons for the Public Power Corporation (PPC), and had considerable expertise in equipment for lignite-fired power plants.
It was also active in defence equipment, at a time when domestic industry was required to account for 30% of the relevant programmes.
METKA had already begun developing its industrial operations in Volos, where significant production and technological capabilities were established. The factory remains part of the Group’s industrial footprint, alongside its more recent activities and facilities, including the Defence Centre.
“That’s how we acquired it,” the chairman said.