Prospective ELPE buyer to hold DEPA privatization key

The prospective buyer of ELPE’s (Hellenic Petroleum) 50.5 percent stake being offered through an international tender will have a pivotal say in the 65 percent privatization of DEPA, the public gas corporation, which, judging by latest developments, will be deferred for 2019.

If ELPE’s prospective strategic investor deems that keeping the petroleum firm’s 35 percent stake in DEPA, without managerial rights, offers no added value, as the current board believes, then this minority stake in the gas utility will certainly head for sale.

Such an outcome would represent a repeat of the DESFA (gas grid operator) sale model for DEPA. The Greek State and ELPE would join forces to offer their DEPA stakes as a combined packaged representing a 65 percent share.

The wide speculation at present highlights that the details of DEPA’s sale remain far from settled.

In recent talks with the country’s lenders, the government has agreed to split DEPA into two firms (networks and commercial) and offer a minority stake of the former and majority in the latter. However, the developments at ELPE could bring about radical change to this plan.

DEPA’s privatization now appears certain to be delayed for beyond the third bailout program’s conclusion, meaning the gas utility’s sale will not take place any sooner than 2019 as the entry of ELPE’s new strategic investor, and the petroleum firm’s resulting decisions, especially in the natural gas market, need to be factored into the overall process.

The list of first-round ELPE bidders, just announced, to advance to the second round is not expected sooner than June.

Once this cut has been announced, second-round qualifiers will be granted access to ELPE’s data room. If these qualifiers submit binding bids within July, as TAIPED, the state privatization fund, would like, then the sale would have a chance of being completed by the end of the year.

Subsequently, the DEPA privatization would follow at some point during 2019. Until then, all DEPA sale scenarios will represent nothing more than mere speculation.