Crucial Developments Impacting Major Construction Firms: Progress on Concession Contracts Ensures Steady Revenue Streams
A significant milestone has been reached with the concession contract for the Northern Road Axis of Crete (VOAK), signed on May 9 between GEK Terna Group and the Greek government. Valued at 1.75 billion euros, this marks the largest road project to be undertaken in Greece.
Sources indicate that both Aktor and Metlen will join the VOAK concession, following an upcoming agreement with GEK Terna.
Additionally, GEK Terna has finalized an agreement with Latsco Family Office, associated with Marianna Latsi, for a 10% stake in Attiki Odos. The Competition Commission was also notified on May 30 about Aktor’s acquisition of Aktor Concessions, which is expected to receive approval within 2-3 months.
The 10% stake in the Attiki Odos concession is valued at 77.246 million euros, reflecting a 15% premium over the initial investment made by GEK Terna.
Regarding Aktor, the transaction with Ellaktor for Aktor Concessions was completed at an enterprise value of 367 million euros, which includes the assumption of 187 million euros in loan obligations. After factoring in available cash of 57 million euros, the net transaction price totals 123 million euros.
Aktor’s CEO, Alexandros Exarchou, described the acquisition as a critical opportunity to secure a package of concessions that would have taken decades to develop organically, with projected net cash flows of around 500 million euros by the end of the next decade.
The Concessions sector is performing impressively for GEK Terna, with first-quarter data showing a 94% increase in revenue and a 96% rise in operating profitability. CEO George Peristeris highlighted that the group’s sustainable operating profitability largely stems from this sector, with further growth anticipated from upcoming concession projects like Egnatia Odos (expected to be signed by year-end) and Kasteli Airport.
Avax management is also focused on enhancing its concessions sector. According to recent statements from Chairman Christos Ioannou and Managing Director Antonis Mitzalis, they aim for non-construction activities (including concessions, PPPs, and real estate) to contribute 40% of total EBITDA within five years.
Meanwhile, Metlen targets an internal rate of return (IRR) of 15% from its concessions projects, which include the Thessaloniki Flyover, bioclimatic school units, and the Thessaly irrigation initiative.
