ELPE sale deal struck, state boosts its hydrocarbon interests

The Greek State, represented by the government, and Paneuropean Oil, a member of the Latsis corporate group, co-shareholders of ELPE (Hellenic Petroleum), have reached a deal to sell at least 50.1 percent of ELPE through an international tender, ELPE has announced in a statement.

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

TAIPED, the state privatization fund controlling the Greek State’s 35.5 percent share, will offer a stake of at least 20 percent, while Paneuropean Oil will provide the other 30.1 percent, as an absolute minimum, the ELPE statement noted, adding that a Memorandum of Understanding (MoU) has been signed.

The agreement’s text details the future management roles of the two shareholders at ELPE, veto rights, the dividend policy, disinvestments and strategy.

However, ELPE’s hydrocarbon exploration and exploitation interests appear to have been handled separately, giving the Greek State a reinforced role regarding its rights in this division, seen as one of national security, as it has to do with control of hydrocarbon deposits and geopolitical issues.

The Greek State’s stronghold of ELPE’s hydrocarbon interests, including increased future revenues from this domain, will be factored in by prospective buyers and, quite obviously, promises to lower the eventual sale price.

Sources noted that the international tender could be announced this month as a swift follow-up to the agreement between the Greek State and Paneuropean Oil.

ELPE’s share price stood at 7.8 euros at the close of yesterday’s session, giving the firm an equity-based value of 2.38 billion euros. This means that a 50 percent share of ELPE would be worth 1.19 billion euros, based on the current share price. This figure, however, is not a true reflection of ELPE’s value as the sale will also include the enterprise’s management rights, which will provide a premium.