Privatization fund TAIPED and the energy ministry, already into the early stages of a sale offering the Greek State’s 65 percent of DEPA Trade, a new entity formed by gas utility DEPA for its privatization, are keeping a close watch on international markets, battered amid fears prompted by the coronavirus spread around the world.
The DEPA Trade sale, an emblematic energy-sector privatization, had already been given a first-round deadline extension for non-binding bids, until March 23, prior to the latest coronavirus-related market concerns. But the worsening international conditions, which prompted markets to plunge on Monday, have made the DEPA Trade sale’s officials far more vigilant.
Though an improvement of market conditions by the DEPA Trade privatization’s March 23 non-binding deadline cannot be ruled out, authorities are certainly concerned for a number of reasons.
DEPA Trade does not offer investors secured WACC levels, as is the case with networks and infrastructure, including DEPA Infrastructure, power grid operator IPTO and distribution network operator DEDDIE/HEDNO. This absence of a fixed yield makes DEPA Trade’s value susceptible to international and domestic market turmoil.
Also, far lower LNG prices at present represent an unfavorable development for DEPA Trade as the company is committed to pipeline natural gas import agreements with take-or-pay clauses. This restricts the firm’s ability to choose.
In addition, investors, local and foreign, inevitably revise investment plans, or, at best, wait, when faced by overwhelming situations such as the coronavirus outbreak.
Furthermore, any market-slump period is not a good time to sell assets. Should markets remain unsettled for an extended period, the market value of DEPA Trade will be impacted.
The government plan remains unchanged, the DEPA Trade privatization still being at an early stage, energy ministry officials told energypress.