Capital Market Commission

ELPE holding company state control thoughts new sale delay

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A local Capital Market Commission demand that would have required the eventual preferred investor in the ELPE (Hellenic Petroleum) to make a public offering to other company shareholders may have been dropped but a new stumbling block, possibly bigger, has surfaced in the ELPE sale offering investors 50.1 percent as the government is now pushing for a plan that would maintain the Greek State’s control of hydrocarbon exploration and production rights at all licenses already awarded to ELPE. These rights would be transferred to a state-controlled holding company.

The government appears to be pursuing a revised arrangement that would offer the Greek state control of ELPE’s existing exploration and production rights with a stake of at least 51 percent, even 100 percent.

Paneuropean, offering 30.47 percent of 45.47 percent held in ELPE to the sale, had reached an agreement last April with the government for the Greek State, offering 20.5 of its 35.5 percent stake, to hold a 25 percent stake, not 51 percent or 100 percent, in the new holding company, to be named Exploration Holding Company. This stake would eventually rise to 36.25 percent, directly and indirectly, for the Greek State.

However, the energy ministry now wants a reexamination of April’s agreement, energypress sources informed.

Over the past few weeks, the ministry has been holding talks with Paneuropean as well as ELPE’s two contenders, Glencore and Vitol, in search for a new arrangement that would increase the Greek State’s control of the new holding company from 25 percent to no less than a 51 percent majority, if not total control.

ELPE bids by end of November, public offering presumed

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TAIPED, the state privatization fund, appears headed towards setting a late-November date for binding bids by prospective buyers in the ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake.

The privatization fund, keen to push ahead the ELPE sale process, which has lost some pace, is acting on the presumption that the winning bidder of PPC’s 50.1 percent will need to follow up with a public offering to the remainder of the company’s shareholders.

If so, either Glencore or Vitol – the sale’s two contenders – will need to buy, at the same price, shares offered by other company shareholders, meaning the buyer could end up with as much as a 70 percent stake of ELPE. Greek and foreign institutional investors, as well as small-scale shareholders, hold a 19 percent stake of ELPE.

The local Capital Market Commission has yet to deliver a decision on whether a public offering procedure will be needed.

Commenting yesterday on the need for swifter progress in the sale’s overall proceedings, energy minister Giorgos Stathakis stated the ELPE sale’s bidding procedure would be completed by the festive season.

At this stage, a proposal entailing a legislative revision by the finance ministry that would exempt ELPE from public offering procedures does not appear to have gained any ground.

At the current rate, given the Capital Market Commission’s delays, the sale is not expected to be completed before the summer or autumn of 2019.

Union action no threat to PPC, ELPE sales, officials assure

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The energy ministry and TAIPED, the state privatization fund, have both reassured respective action taken by union groups representing the main power utility PPC and ELPE (Hellenic Petroleum) will not disrupt ongoing privatization efforts for either.

All necessary steps have been made to ensure smooth progress of a bailout-required sale of PPC lignite units and mines representing 40 percent of the power utility’s lignite capacity, the energy ministry has  declared.

As for the ELPE sale, TAIPED – representing the Greek State, offering 20.5 of its 35.5 percent stake along with Paneuropean’s 30.47 percent of 45.47 percent held – has opted not to comment on the mobilization efforts of PSEEP, the ELPE workers union group, suggesting it does not fear a disruption of the 50.1 percent sale.

Genop, the PPC union, has filed a case to the Council of State, Greece’s Supreme Administrative Court, seeking a rejection of environmental terms concerning the Meliti power facility included in PPC’s sale package. This move’s ultimate aim is to delay the overall sale.

PSEEP has taken triple action, filing its ELPE case to the local Capital Market Commission, which has prompted a public offering procedure dispute, London bourse authorities, and European Parliament’s Committee on Petitions (PETI), believing a violation of European law exists.

 

Ministry proposes law revision for ELPE sale’s public offering dispute

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Greece’s finance ministry has proposed a legislative revision as a solution exempting the ELPE (Hellenic Petroleum) privatization from law concerning public offering procedures.

The Capital Market Commission, locked in a dispute with the ministry and TAIPED, the state privatization fund, has insisted that the ELPE privatization cannot be exempted from public offering procedures as, besides the Greek State, selling 20.5 of its 35.5 percent stake, the sale also involves a private-sector company, Paneuropean, ELPE’s main shareholder, which owns 45.47 percent and is selling a 30.47 percent stake. Subsequently, the sale cannot be regarded as one of exclusive interest to the public sector, the Capital Market Commission has contended.

Insiders believe the finance ministry’s revision proposal will not be easy to achieve as the law concerning public offers is clear.

The dispute has prompted a deadline delay for binding bids, now expected to be extended until no sooner than December.

Dutch enterprise Vitol and Switzerland’s Glencore are the two contenders in an international tender offering 51 percent of ELPE.

 

ELPE privatization’s public offering decision needed within ten days

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The next ten-day period will be of crucial importance for the ELPE (Hellenic Petroleum) privatization and a request made by Greece’s Capital Market Commission calling for the eventual buyer of a 50.1 percent stake of ELPE – being offered through an international tender now down to two contenders, Dutch enterprise Vitol and Switzerland’s Glencore – to buy shares offered by smaller shareholder groups at the same price, through a public offering procedure.

Disagreements between authorities will need to be resolved no later than October 20, otherwise TAIPED, the state privatization fund, will need to delay the binding bids deadline faced by the prospective buyers until November, possibly later.

The Capital Market Commission appears has insisted that this privatization cannot be exempted from public offering procedures as, besides the Greek State, selling 20.5 of its 35.5 percent stake, the sale also involves a private-sector company, Paneuropean, ELPE’s main shareholder, which owns 45.47 percent and is selling a 30.47 percent stake. Subsequently, the sale cannot be regarded as one of exclusive interest to the public sector, the Capital Market Commission contends.

TAIPED disagrees with this stance and has referred to reports of independent law firms claiming there is no public offer issue.

If the Capital Market Commission’s position prevails, then the ELPE privatization’s winning bidder – either Vitol or Glencore – will need to need to buy shares offered by other shareholders at the same price. The ELPE stake to be acquired by the eventual buyer could reach as much as 70 percent, as institutional and small-scale investors, Greek and foreign, currently hold a 19 percent stake in the petroleum firm.

 

ELPE buyer will need to acquire up to 70% in public offering

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The eventual buyer of a 50.1 percent stake of ELPE (Hellenic Petroleum) offered through an international tender, now down to two contenders, Dutch enterprise Vitol and Switzerland’s Glencore, will also need to buy shares offered by smaller shareholder groups at the same price, through a public offering procedure, the legal division at Greece’s Capital Market Commission has determined.

Subsequently, Vitol or Glencore will most likely need to spend additional amounts to complete the privatization. Neither of the two companies, both international powerhouses, would be troubled by the extra financial demands of such an outcome, expected to reach several hundred million euros more, to acquire an overall ELPE stake that could end up totaling around 70 percent, pundits told energypress.

However, the need to stage a public offering procedure for the ELPE share transfer could impact the amount Glencore and Vitol will be willing to offer for the 50.1 percent stake as they may also consider the additional amounts that could be needed for the acquisition of shares from the other shareholder groups.

The eventual buyer of ELPE’s 50.1 stake will have no real need to acquire an additional stake for a 70 percent holding, as the initial lot, alone, secures a controlling stake.

Paneuropean, ELPE’s main shareholder owning 45.47 percent, is selling 30.47 percent, while the Greek State is selling 20.5 of its 35.5 percent stake.

From there on, private shareholders hold 7.7 percent, foreign institutional investors a further 6.5 percent, and Greek institutional investors 4.8 percent. These three shareholder groups, representing a 19 percent stake or a total of 58,233,522 shares, will need to be given the opportunity to sell at the share price level to be secured by Paneuropean and the Greek State, according to the Capital Market Commission.

ELPE’s 50.1 percent is currently estimated to be worth about 1.1 billion euros. The sale of an additional 19 percent could increase the amount the buyer will need to spend to roughly 1.5 billion euros.

It remains unclear as to why the matter has only just emerged. Capital Market Commission officials contend their legal team has been working on the issue for months.

According to the current legal framework, share transfers exempted from mandatory public offering procedures are limited to privatizations held to benefit the public sector. ELPE’s sale cannot be exempted from public offering procedures as Paneuropean, the main shareholder and biggest seller, is offering 30.47 percent as a private-sector enterprise with an objective to maximize profit, experts explained.

Meanwhile, Vitol representatives did not turn up to ELPE’s Aspropyrgos and Elefsina refineries for on-site inspections yesterday, as had been scheduled, but were informed at an alternative secret location to avoid union group resistance. A week earlier, Glencore representatives acted likewise.

 

 

 

 

 

ELPE union mobilizes to block Vitol inspection of refineries

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The ELPE (Hellenic Petroleum) union and its members have planned action for today and tomorrow with the aim of preventing representatives of Dutch enterprise Vitol, one of two prospective buyers through to the second round of an international tender offering a 50.1 percent stake of ELPE, from making on-site inspections of the Greek petroleum group’s facilities.

Vitol representatives are scheduled to visit ELPE’s refineries in Elefsina and Aspropyrgos, both west of Athens, today and tomorrow. However, this plan could be revised to avoid further delays to the sale procedure.

Visiting Vitol officials could be updated on the ELPE facilities at an alternative location, as was also the case a few weeks ago with representatives of Switzerland’s Glencore, the sale’s other candidate, who were barred entry into ELPE’s refineries by union members.

ELPE chairman Stathis Tsotsoros has described the union’s mobilization as an extremely serious matter. The government intends to take initiatives to ensure the completion of the site inspection stage of the sale process, he has noted.

Besides its blockades, the ELPE union has also taken action at a local and EU level claiming the sale breaches Greek and EU laws concerning acquisitions through public offers.

In an appeal forwarded to Greece’s Capital Market Commission, the ELPE union contends that the sale procedure launched by TAIPED, the state privatization fund, threatens to undermine the interests of the public sector, ELPE, the company’s shareholders, as well as ELPE workers.

Similar concerns, at an EU level, were expressed in the ELPE union’s appeal to European Parliament’s Committee on Petitions (PETI), responsible for the maintenance of EU law.