UPDATE

Two consortiums participating in the natural gas grid operator DESFA’s international tender offering a 66 percent stake submitted their follow-up offers today as first-round offers, both over 400 million euros, were less than 15 percent apart. TAIPED, the state privatization fund, included a term requiring additional bids in such a case to generate the highest possible sale price.

Energypress previously reported:

DESFA, the natural gas grid operator, may have posted a spectacular operating profit increase of 70 percent and impressive cash deposits amounting to 228 million euros, but the firm’s subdued weighted average cost of capital (WACC), as well as the rejection by authorities of a steady WACC level proposal for the operator requested by bidders taking part in an ongoing international tender offering a 66 percent stake, could keep offers below 500 million euros, pundits believe.

Two consortiums participating in DESFA’s international tender are expected to submit their follow-up offers today as first-round offers, both over 400 million euros, were less than 15 percent apart. TAIPED, the state privatization fund, included a term requiring additional bids in such a case to generate the highest possible sale price.

Local officials have been optimistic in the lead-up and expect the new offers to reach close to, or even exceed, 500 million euros.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to participate in the DESFA tender. All three hold key stakes in the TAP consortium. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Just days ago, RAE, the Regulatory Authority for Energy, set annual WACC levels for IPTO, the power grid operator, at 7 percent for 2018, 6.9 percent for 2019, 6.5 percent for 2020 and 6.3 percent for 2021. This is seen as a precursor for DESFA rates to be set by RAE within the current year.

DESFA’s bidders had sought a steady network usage rate for the gas grid operator during an earlier stage in the tender.

The eligibility of both bidding teams was thoroughly inspected by authorities during the processing stage of first-round offers, which took over a month to complete. As a result, the new offers to be submitted today should be unsealed very quickly, by Friday the latest, unless new funding sources are added to any of the two teams.

In a previous and unfinished sale attempt that also offered a 66 percent of DESFA, Azerbaijan’s Socar was declared the prefered bidder with a bid of 400 million euros. At the time, five years ago, when Greece’s country risk factor was higher, the operator’s 66 percent had been estimated to be worth 330 million euros.