Independent Valuator to the PPC S.A. in relation to the sale of 100% of the share capital of “LIGNITIKI MELITIS S.A.” and/or “LIGNITIKI MEGALOPOLIS S.A.”

The two (2) new legal entities, wholly owned subsidiaries of PPC, were established on June 30th, 2018 under the trade name “Lignitiki Melitis SA” and “Lignitiki Megalopolis SA”, whereas PPC launched the tender procedure on May 31, 2018, as per the provisions of the Law, by issuing an Invitation for the submission of Expression of Interest. The objective of this phase is the selection of the Preferred Strategic Investor(s) for each or both Divestment Business(es), whereas each Strategic Investor may submit an offer for one or both the Divestment Businesses.
In conjunction with the Tender, an assessment of the fair market value of Lignitiki Melitis S.A. and Lignitiki Megalopolis S.A. (hereinafter called the “Companies”) as of has been requested by the management of Power Public Corporation S.A., in view of the prospective sale of the shares of the new legal entities to interested  investor(s).

Kantor analysis included the following steps, though not limited only to them:

• Conducted desktop research on the industry, the current corresponding operational and financial conditions as well as on  comparable companies
• Examined information which was available on a Virtual Data Room, that contained data related to the Companies, and in particular:
• Company Strategic Plans  
• Company historic financial and operational information
• Information regarding the past, present and future trends of the target market/ to which the Companies operate

Kantor developed a Discounted Cash Flows (DCF) model in order to estimate the projected Balance Sheet, Profit & Loss and Cash Flows for the Companies, so as to derive a range of values for 100% of the Companies’ equity on a controlling interest basis, based upon assumptions, projections and other available market information. As part of the DCF analysis, a sensitivity analysis have been performed, which includes different values for the Companies’ Weighted Average Cost of Capital (WACC), electricity sale price as well as CO2 price forecast and results in estimating a range of the Companies’ value

Moreover, Kantor conducted a search of similar transactions relating to the acquisition of companies with similar characteristics to the Companies internationally, that could be used for the valuation of the 100% of the Companies’ equity under the Comparable Transactions method, utilising intelligent databases and other publicly available sources of information.