ELPE 50.1% sale aiming to attract 5-6 majors in first round

Expressions of interest by five or six big international firms, either alone or as consortium members, for the ELPE (Hellenic Petroleum) privatization, offering a 50.1 percent stake, would represent a major success, a pundit has told energypress, reflecting an overall view of the sale effort’s prospects.

Attracting investors for a Greek refinery with a total equity value of 2.4 billion euros, which should secure a sum of between 1.2 and 1.3 million euros for the stake being sold, represents an enormous challenge, the source contended.

ELPE may be a local giant but represents no more than a small to medium-sized regional power from a global refining industry perspective, which should impact the sale price.

TAIPED, the state privatization fund, has just extended the privatization’s expression of interest deadline, a first-round procedure, to May 30 from May 18, the objective being to satisfy as many investor queries as possible, offer more time and, ultimately, maximize the turnout.

Both TAIPED and ELPE know well that a greater number of participants in the international tender will increase the likelihood of a bidding war and higher bids, as was underlined by the recent DESFA (natural gas grid operator) tender.

A wide gamut of possible investors, including refining, exploration and production firms, as well funds, has so far been approached by the ELPE sellers.

It remains to be seen how the government’s effort to secure a solid hydrocarbon role for the Greek State following negotiations with ELPE co-shareholder Paneuropean, a member of the Latsis group, will affect ELPE’s sale price.

The Greek State currently holds a 35.5 percent stake of ELPE and Paneuropean Oil controls a 45.47 percent stake.

An agreement has been reached for the establishment of a holding company as an umbrella for separate companies to each represent exploration and exploitation rights secured by ELPE for various blocks around Greece – Arta-Preveza; northwest Peloponnese; Gulf of Patras; Block 2, west of Corfu; and Gulf of Kyparissi.

Blocks west and southwest of Crete and in the Ionian Sea will also be incorporated into the holding company if ongoing tenders that have drawn bids from ELPE, via consortiums, produce results.

The Greek State is planned to control 36.25 percent of the holding company, either directly or indirectly, following the ELPE privatization.