GEK TERNA's epic failure: Borrowed 2.60 billion euros only to post losses of 40 million euros

Can you borrow 2.60 billion euros and show losses of 40 million euros? This can be characterized as an epic failure, for a company to borrow 2.60 billion euros and show losses of 40 million euros... Which company is this? Obviously GEK TERNA, which mobilized all forces in the foreground and background, secured the Attiki Odos concession, borrowed 2.60 billion euros, and is posting losses of 40 million euros. This shows that either the planning missed the mark, or the business plan failed, or the entire strategy proved to be flawed and unprofitable.

Recalling the extreme over-indebtedness of GEK TERNA and the group's weak performance

1. Letters of guarantee worth 1.9 billion euros (written commitment of banks)

2. New loan for the Northern Road Axis of Crete amounting to 1.4 billion euros

3. Loan for Attiki Odos amounting to 2.60 billion euros

4. Loan for Egnatia Odos amounting to 1.039 billion euros

5. Loan for Nea Kentriki Odos amounting to 391 million euros

6. Kastelli, public-private partnerships (PPPs) for water supply, waste management, HERON, TERNA Construction, and other operational activities... loans amounting to 644 million euros

7. Parent company loans amounting to 1.345 billion euros Total loans amounting to 9.3 billion euros, and not the 4.1 billion euros communicated by GEK TERNA. This analysis does not include non-consolidated participations, as in that case, the debt load increases even further.

How is the GEK TERNA group valued?

Let us assume that the annual EBITDA of GEK TERNA amounts to 700 to 730 million euros, which means that the debt ratio of GEK TERNA stands at 9.3 billion euros divided by 730 million euros EBITDA—making it 12 times EBITDA, and excluding letters of guarantee, 10 times EBITDA. This is unprecedented anywhere in the world... but showing a loss of 40 million euros from a concession agreement is an extreme failure.

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