Important developments, of key importance for large construction groups, are underway regarding concession contracts, which yield recurring and stable revenues.
One of the most important development is the concession contract for the Northern Road Axis of Crete (VOAK), which was signed on May 9 between the GEK Terna Group and the Greek state with a construction project of 1.75 billion euros (the largest road project to be executed in the country).
According to sources, both Aktor and Metlen will participate in the concession for VOAK, following an agreement that they will conclude in the near future with GEK Terna.
In the meantime, the agreement between GEK Terna and Latsco Family Office, interests of Marianna Latsi, was completed, for the acquisition of a 10% stake in Attiki Odos, while on May 30, the Competition Commission was informed of the acquisition of Aktor Concessions by Aktor, in order to give the green light within 2-3 months.
The price for 10% of the Attiki Odos concession contract is 77.246 million, corresponding to a premium of 15% on the initial binding investment paid by GEK Terna.
Regarding Aktor, the agreement with Ellaktor for the acquisition of Aktor Concessions was concluded with the enterprise value of 367 million euros and with the assumption of its loan obligations totaling 187 million euros. Taking into account its cash available (57 million euros) the net price of the transaction reached 123 million euros.
As stated by Aktor’s CEO, Alexandros Exarchou, the acquisition of Aktor Concessions was a significant opportunity to acquire a concessions package, which would have required decades to develop organically and generate net cash flows of approximately 500 million euros by the end of the next decade.
The performance of the Concessions sector for GEK Terna is noteworthy, as based on the first quarter data, its revenue and operating profitability increased by 94% and 96% respectively. According to CEO, George Peristeris, the operating profitability of the Group recorded in the first quarter is sustainable, as it comes mainly from the concessions sector. Further strengthening is expected with the operation of the next concession projects, such as Egnatia Odos (estimated to be signed by the end of the year) and Kasteli Airport.
The Avax management is also seeking to strengthen the concessions sector and according to recent estimates by the Group’s chairman, Christos Ioannou, and the managing director, Antonis Mitzalis, the goal is for activities outside construction (concessions, PPPs, real estate) to generate 40% of total EBITDA in five years.
On its part, Metlen expects an internal rate of return (IRR) of 15% from the Concessions sector, having undertaken projects such as the Thessaloniki Flyover, the bioclimatic school units and the Thessaly irrigation program.
