The recent equity share increase by Paneuropean Oil, a member of the Latsis corporate group, in ELPE (Hellenic Petroleum) from 42 percent to 45.5 percent has been interpreted by market officials as an attempt, by the Latsis group, to increase the market value of its share in the venture in preparation for a partial or full sale of its ELPE stake at a higher equity price when TAIPED, the State Privatization Fund, announces the sale of the Greek State’s 35 percent share of ELPE within 2017.
The Latsis group has not offered any comments on its increased ELPE stake.
Earlier this week, when it was announced that Paneuropean had increased its stake in ELPE from 42 percent to 45.5 percent, ELPE’s share rose by 4.42 percent to 3.78 euros. Yesterday, it increased by 1.59 percent to 3.84 euros.
Although officially denied by the Latsis group, its disengagement from ELPE has been contemplated since at least 2012, when a previous attempt was made to privatize the Greek State’s share in the oil refinery.
If the Latsis group is to abandon ELPE, it will need to sell along with the Greek State as the respective stakes of the two, if offered to an investor separately, are not commercially appealing. Any potential investor, whether from Russia, Iran, or anywhere else for that matter, would want control of a majority stake in ELPE. Acquiring the ELPE stake held by either Paneuropean or the Greek State, both under 51 percent, will not do.
In 2012, TAIPED’s then-administration had worked on a formula that would have offered the Greek State’s share of ELPE along with a portion of Paneuropean’s share to facilitate a privatization deal.
At the time, it had been reported that the Latsis group wanted to maintain a considerable share in ELPE but was willing to sell a portion and lower its 42 percent stake to a level of about 30 percent.
This partial surrender by the Latsis group would have stood as an attractive prospect for any strategic investor as it would have offered majority control of ELPE. This prospect, alone, increased the market value of the Latsis share that would have been sold.