UPDATE 1-Greece seeks alternative to power grid sale-energy minister

Mon Sep 28, 2015 6:35am EDT Related: STOCKS, M&A, BONDS, MARKETS

 (Reuters) - Greece wants to make its power grid operator ADMIE independent instead of privatising it, its energy minister said on Monday ahead of an expected bailout review by the country's international lenders next month.

Under its latest EU/IMF bailout, Athens has agreed to start the privatisation of ADMIE in October or find alternative ways to open up its electricity market. ADMIE is owned by dominant power utility PPC.

The country has also agreed to sell a 17 percent stake in PPC, potentially in 2016.

Greek Energy Minister Panos Skourletis told Greek Real FM radio that ADMIE should become a state-owned independent entity with its fixed assets remaining under the ownership of PPC.

"There was a demand by the lenders to privatise (ADMIE)," he said. "Our counter proposal is to set up a separate (entity) from PPC grid operator, one that is state-controlled."

Skourletis said the government did not want to further privatise PPC, which is 51 percent state-owned and controls 97 percent of Greece's retail electricity market.

"There won't be a further privatisation of PPC," he said.

Greece had agreed to privatise PPC and sell a 66 percent stake in ADMIE, as part of its previous bailout. State Grid Corporation of China (SGCC) was among the investors interested for ADMIE.

The leftist Syriza party halted both sales when it came to power for the first time in January.

Syriza was re-elected this month promising to implement the terms of a third 86 billion euro bailout but also to negotiate what it calls "grey areas", such as the liberalisation of its energy market and the possible sale of PPC.

It has made a commitment to undertake a series of privatisations in the next two years to help fund its banks' recapitalisation and reduce its huge debts.

"These (privatisations) will continue, but we need to find the most favourable terms for the society," Skourletis said. (Reporting by Angeliki Koutantou and Renee Maltezou. Editing by Jane Merriman)