We are all in a journey towards change. Greece is definitely in that road of changes and reforms, being through a very difficult period, with severe recession, trying to find its way towards competitiveness and sustainable growth.
Being for the last 5 years, Deputy CEO of one of the largest listed companies in Greece and the leading electric utility, which runs 109 stations and serves more than 7.4 million customers across the country, I had full exposure to this new, highly adverse, uncertain & volatile environment and realised issues and challenges which do not become apparent in an environment of prosperity and economic growth.
First of all, dealing with deep and prolonged economic crisis, requires ability to manage risk and uncertainty; this means ability to make decisions when there are no easy answers or many alternative options. At the pick of the crisis, back in 2012, there were very few allies or strategic partners and no banks to provide the necessary liquidity. Thus a company and its management had to rely on themselves and survive based on their own strengths and resources. This can only happen having the right people and building the right teams which are effective, work well together and reach consensus and above all, are balanced, fearless and resilient. Such human capital is vital in managing crisis or complex situations and usually they are the most committed, loyal and visionary people, because under such conditions, there are no bonuses or awards, on the contrary, there are only more risks associated with high responsibilities.
It is also true that in this environment, companies and management are changing and becoming more flexible, innovative and open-minded. The strategic and financial objectives are re-assessed, being cautious on capex and budget control and shifting focus towards reinforcement of cashflows and profitability rather than building ambitious business plans and growth strategies. Liquidity becomes the number one priority.
More importantly, companies are mobilised and are taking actions, in an effort to respond and adapt to the new environment. It is the time that difficult decisions are made, targeting cost containment and improvement of performance, decisions or actions which during the good times may have been postponed many times. Therefore, companies are becoming stronger, more flexible & creative, more extrovert and open to new ideas, trying to build networks and alliances which will support their businesses in the future.
Greece has gone a long way over the last 5 years. And so did the Greek businesses and the Greek people. However, the ability of an economy to withstand and absorb a crisis and finally bounce back, requires also strategic alliances, foreign investments and access to capital, as well as solidarity, collaboration, sharing of knowledge and innovation and many other principles which are at the heart of the European Union vision.
I like to remain positive about the future. PPC, despite operating within a very difficult economic environment and a transitioning regulatory framework, not only managed to survive but also to carry on successfully its strategic and financial planning. We managed to promote and implement difficult decisions regarding our organisational & operational model, we became more flexible and adaptive to the new environment and above all we managed to significantly improve our operational performance and productivity, through a major cost cutting program, with total payroll savings during the period 2009-2013 exceeding € 650m, a reduction of c. 38% compared to 2009 levels.
As a result of the above actions and strategy, we managed to carry on with our financial planning, concluding one of the biggest refinancing deals with the Greek banking system, through a syndicated loan of € 2.2 billion, a transaction which led to 3 notches upgrade by S&P. At the same time, we raised new capital, first of all by securing a € 740 million syndicated loan with foreign banks for new capex in generation as well as by capitalising on our long and strategic relationship with the European Investment Bank, raising funds in excess of € 1.5 billion for strategic projects. We also proceeded with a successful bond issue of € 700 million last April in the international debt capital markets, an issue which was 6 times oversubscribed compared to initial amount.
We should not forget that Greece today is a country with extremely high levels of unemployment and increasing poverty. For this reason, we have introduced as a country special Social Tariffs for vulnerable groups of consumers, to which more than 600,000 households have applied and are benefiting today. At the same time, PPC, over the last years, have entered into almost 1 million electricity bill settlements. Such conditions in the energy market are totally new and are the result of the economic crisis in Greece, combined with increasing electricity bills, attributed to the largest extent to increased taxes and levies, some of which are not related to energy.
Today, the Greek power market is in a transitioning period towards market liberalization but it is still far away from the EU Target Model. For PPC, in order to be able to continue with its strategic planning, in order to be able to support the Γρεεκ economy, we need more visibility on our operations and on our earnings. This requires a more stable and predictable regulatory framework, with fair market rules for all players, in line with the EU Target model. Such conditions are absolutely critical for all utilities and for all countries, in the effort to find a balance between security of supply, cost competitiveness and environmental performance.