Carlyle

ELPE sale ‘may be dropped’ if alternate revenue plan is found

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An ELPE (Hellenic Petroleum) privatization offering a 50.1 percent stake, whose initial tender failed to produce a result last week, could be scrapped if the government finds an alternative way of raising the sale’s anticipated 500 million euros for the country’s privatization fund, highly-ranked energy ministry sources have told energypress.

“The ELPE sale is not a structural measure or market revision but was included in the privatization fund TAIPED’s program for cash-collecting purposes as the sale price achieved would have contributed to reducing the national debt,” a source noted, indicating alternative ways of raising an equivalent amount could be sought instead of an ELPE sale relaunch.

If so, the government will need to convince the country’s lenders of an alternative fund-raising plan when they arrive in Athens next month for a third post-bailout review of the Greek economy.

The Greek State was offering 20 percent of its 35.48 percent share in ELPE and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

Glencore, an early candidate, was eventually joined by US firm Carlyle, and Dutch trading firm Vitol, the sale’s other early contender, was joined by Algeria’s Sonatrach. Neither bidding team followed through with offers last week, when the deadline for binding bids expired.

 

ELPE privatization effort fails to deliver result, next step unclear

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A tender offering a 50.1 percent stake of ELPE (Hellenic Petroleum), whose complicated make-up involved two sellers and four possible buyers, has failed to produce a result.

The Greek State was offering 20 percent of its 35.48 percent share and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

As officials had strongly suspected ahead of yesterday’s deadline for binding bids, the sale procedure did not convince participants for a variety of reasons.

In the lead-up, SPA and SHA term negotiations with the sale’s main candidates Glencore and Vitol, both trading firms, made clear that emphasis needed to be placed on protecting the association between ELPE’s main activity, refining, and the domestic market. The petroleum group currently covers approximately 70 percent of the Greek market’s needs.

Glencore, which was eventually joined by US firm Carlyle for this sale, had other ideas. During the SPA talks, it strove for the incorporation of a term that would have offered the trading company exclusive control of ELPE’s production.

Instead, clauses were introduced to the tender’s SPA to protect supply to the Greek market and maintain the country’s strategic reserves for security reasons.

This development prompted the sale’s officials to place their hopes for a result on the privatization’s other second-round qualifier, Dutch trading firm Vitol, which was latter joined by Algeria’s Sonatrach.

The Algerian state-run energy company proved to be the more interested partner of this pairing, but the political turmoil over recent weeks in Algeria, which led to the resignation earlier this week of President Abdelaziz Bouteflika, the country’s leader over the past 20 years, prevented Sonatrach from pursuing what would have been the biggest takeover in the company’s history.

It remains to be seen how the government and TAIPED, the privatization fund, will respond to the sale’s failure. TAIPED had anticipated a significant inflow of privatization revenues from the ELPE sale.

 

Binding bids for ELPE’s 50.1% due today amid uncertainty

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Binding bids for an ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake are due today, bringing one of the country’s biggest energy-sector privatizations to a crucial stage.

The Greek State is offering 20 percent of its 35.48 percent share and the Latsis group’s Paneuropean Oil is selling 30.1 percent of its 45.47 stake.

Two bidding teams have reached the privatization’s final stage. Glencore, an early qualifier, has teamed up with US firm Carlyle, while Vitol, the procedure’s other early candidate, formed an alliance with Algeria’s Sonatrach for this sale.

Their level of acceptance of the sale’s SPA and SHA terms, as well as ELPE’s financial figures, assessed in due dilligence, will become apparent later in the day.

Despite today’s bidding deadline, it still remains uncertain if the two teams will submit offers. If made, they will be unveiled later this afternoon, at 5pm.  Dossiers carrying technical details will be opened for assessment over the next few days.

Improved bids could be called for if the privatization’s terms have been met by participants.

Should the current sale effort fail to produce a result, the government will need to engage in talks with the country’s lenders on the next move for the ELPE privatization.

ELPE sale expectations, risks high as deadline day nears

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A succession of record-breaking financial results at ELPE (Hellenic Petroleum) over the past few years has boosted the company’s expectations of an elevated sale price in a privatization offering a 50.1 percent stake.

Even so, whether the sale’s two bidding teams both end up submitting binding bids on Wednesday, the deadline day, remains a 50-50 situation, officials have noted, pointing out tough sale-term negotiations that have taken place between the sellers – the Greek State, offering 20 percent of its 35.48 percent share, and the Latsis group’s Paneuropean Oil, selling 30.1 percent of its 45.47 percent share – and the possible buyers.

The privatization’s two early qualifiers, Glencore and Vitol, have pressed hard for sale-term improvements. These demands then increased with the emergence of US firm Carlyle and Algeria’s Sonatrach as respective partners of the initial candidates.

Despite the privatization’s plan for the sale of a 50.1 percent majority, the Greek State has insisted on maintaining veto rights for crucial decisions of national significance.

TAIPED, the state privatization fund, was forced to delay the binding-bids deadline and most recently rescheduled the date for April 3 from March 29.

ELPE’s EBITDA figure averaged 763 million euros between 2015 and 2018, more than double the 350 million-euro average achieved between 2011 and 2014.

ELPE bids deadline extended to April 3, union announces strike

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The Greek privatization fund TAIPED has extended a binding-bids deadline for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) to April 3 from March 29, a  development that takes the sale procedure into the home stretch.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

The sale’s officials may call for a second round of improved binding bids if needed, sources informed.

Meanwhile, the ELPE workers union group PSEEP has reacted strongly against the planned privatization, describing it as a “major scandal” and “national crime”.  PSEEP has announced a three-day strike for March 28 to 30.

 

 

ELPE sale March 29 binding bids deadline set for mild extension

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A March 29 binding-bids deadline set for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) will need to be extended by a few days as officials require more time to finalize details of the privatization’s sale and purchase (SPA) and shareholder (SHA) agreements, sources have informed.

The Greek privatization fund TAIPED, energy ministry and potential buyers are currently consulting on these details.

Energy minister Giorgos Stathakis has apparently raised certain objections and is awaiting responses from the privatization fund and investors, sources have informed.

Also, a US trip made last week by the energy minister to a major energy conference in Houston, Texas has contributed to the overall procedure’s delay, prompting the need for a binding-bids deadline extension.

Sources informed a few extra days beyond the March 29 date will be needed, while some believe the deadline could be stretched to around April 10.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

 

ELPE bidding deadline in sale offering 50.1% set for March 29

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Two bidding teams participating in a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) have been set a March 29 deadline for binding bids, the state privatization fund TAIPED, staging the sale, has decided. All candidates have been informed.

Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach for the ELPE tender.

Much work was needed to finalize this privatization’s sale and purchase (SPA) and shareholder (SHA) agreements.

Also, preceding ELPE sale deadlines needed to be stretched to allow the new entries, Carlyle and Sonatrach, to prepare, officials have noted.

ELPE’s bourse value at the end of yesterday’s trading session was 2.53 billion euros. The company’s share has gained 5.3 percent over the past month.

The European Commission, part of the troika, wants the ELPE privatization to be completed by the year’s half-way mark. In a recent report, Brussels expressed concern over the limited field of final-round qualifiers.

ELPE bidders given exemption right for ELPE Upstream costs

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Potential buyers participating in a sale offering a controlling 50.1 percent stake in ELPE (Hellenic Petroleum) will be given the option of being exempted from hydrocarbon exploration-related expenses concerning ELPE Upstream, a separate division holding ELPE’s hydrocarbon exploration and concession rights.

A 51 percent stake of ELPE Upstream will remain under the control of the state. Potential buyers will have the right to refuse to partake in ELPE Upstream’s investment activities, given the minority stake they will hold in this venture.

This cost exemption option appears to have satisfied potential buyers of ELPE’s 50.1 percent, preparing to submit binding bids, possibly within the first ten days of March. A deadline has yet to be set.

Head representatives, including Sonatrach boss Abdelmoumene Ould Kaddou, have spent time in Athens over the past couple of weeks for meetings with Greek state privatization fund TAIPED officials. No objections appear to have been raised.

Sonatrach recently entered the ELPE sale, joining Vitol as a partner. American firm Carlyle, the other new entry, has joined forces with Glencore for this sale.

All of ELPE’s current exploration and production licenses have been transferred to ELPE Upstream.

ELPE sale deadline headed for early-March extension

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The state privatization fund TAIPED appears likely to reset the binding bids deadline of a sale offering a 50.1 percent stake in ELPE (Hellenic Petroleum) for a date within the first week of March, more than one month beyond the current January 31 date, reliable sources have informed.

The need for additional time is being attributed to the recent entry into the sale of two new candidates, American firm Carlyle and Algeria’s Sonatrach. They have established respective partnerships with the procedure’s two existing candidates, Glencore and Vitol, and will need time to appraise ELPE before shaping bids with their partners.

TAIPED has yet to officially endorse the new bidding pairs but is expected to offer its approval very soon, possibly within the current week.

The ELPE sale procedure has needed to overcome various obstacles along the way. Late last year, Greece’s Capital Market Commission ruled that the preferred investor to emerge from the sale will not need to make a public offering to other company shareholders, ending an ambiguity that caused delays.

ELPE sale’s binding offers in late February, early March

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The binding bids deadline of a sale offering a controlling 50.1 percent stake in ELPE (Hellenic Petroleum) is expected to be set for late February or early March, sources closely monitoring the privatization’s developments have informed.

This one-and-a-half month period should provide enough time for the sale’s new entries, American firm Carlyle and Algeria’s Sonatrach – who have established respective partnerships with the procedure’s two existing candidates, Glencore and Vitol – to appraise ELPE.

No other pending issues remain other than a response from the prospective buyers on the privatization’s plan for ELPE Upstream. Holding Hellenic Petroleum’s hydrocarbon exploration and concession rights, ELPE Upstream will remain under the control of the state with a 51 percent stake.

The entire portfolio of ELPE’s current hydrocarbon exploration and concession rights has been incorporated into ELPE Upstream. Future concession rights are also planned to be added to this holding company.

The state will reserve the right to appoint ELPE Upstream’s managing director, while, according to sources, the holding company’s minority shareholder will have the right to decide on investment decisions and presumably exercise veto rights.

ELPE’s details were uploaded into a virtual data room last week for investors to study as they prepare to shape their offers.

Market analysts expect ELPE 50.1% sale to reach over €2bn

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Market analysts, including HSBC, in a new report, expect the ELPE group (Hellenic Petroleum) sale offering a 50.1 percent stake to exceed 2 billion euros.

Besides the privatization’s higher aspirations generated by ELPE’s strong profit figures, including a streak of records, international analysts are also pointing to excellent prospects for the petroleum group over the next two years, at least, as well as its limited exposure to mazut.

ELPE’s share ended trading last Friday at 7.57 euros but the petroleum group’s privatization may escalate its share price by 50 percent to 11.7 euros, according to the recent HSBC report, covering refineries in Europe, the Middle East and Africa (EMEA).

Given a share price of 11.7 euros, a 50.1 percent stake of ELPE would be worth 1.78 billion euros. Adding a 20 percent premium to this figure for the petroleum firm’s management rights also offered in the sale increases the value to 2.1 billion euros.

ELPE, it should also be noted, is one of the wider region’s few refineries which, with a minimal amount of facility adjustments, will be capable of producing new environmentally friendly shipping fuels by 2020. This prospect, promising even higher profit levels at ELPE in the near future, is seen adding to the petroleum group’s appeal among investors.

According to latest developments, buyers will be asked to submit binding offers within the first quarter of 2019.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to be discussing respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. No official announcements have been made on the rumored Glencore-Carlyle and Vitol-Sonatrach pairings.

TAIPED, the privatization fund, has yet to set a deadline for new partnerships.

Early elections not a threat for ELPE sale, officials assure

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Greek privatization procedures already at a mature stage and not requiring any legislative revisions or presidential decrees, such as the ongoing ELPE (Hellenic Petroleum) sale, would not be affected by early elections ahead of the completion of the government’s four-year mandate in October 2019, even if these were to be held as early as March, prospective buyers in the ELPE sale, offering a 50.1 percent stake, have been assured by the privatization fund TAIPED in response to questions on the matter.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to have established respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. However, to date, no official announcements have been made on the Glencore-Carlyle and Vitol-Sonatrach pairings.

If verified, the ELPE sale’s new entries can be expected to raise hopes for higher offers when binding bids are submitted at a still-unspecified date within January.

Glencore joined by Carlyle, Vitol by Sonatrach in ELPE sale

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Two new participants, US firm Carlyle and Algeria’s Sonatrach, have entered the ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake by establishing respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol.

Though not yet officially announced, the Glencore-Carlyle and Vitol-Sonatrach pairings have apparently cemented, sources in contact with these players have told energypress.

The ELPE sale’s new arrivals can be expected to raise hopes for higher offers when binding bids are submitted at a still-unspecified date within January.

Carlyle’s entry into the sale had been rumored prior to the procedure’s first round of non-binding bids, along with a list of other major players, including Italian petroleum firm Eni.

In a related development, the Greek State appears to have finalized a decision to participate with a 51 percent stake in a new hydrocarbon holding company referred to as ELPE Upstream. This means the winning bidding team of the ELPE sale will also acquire a 49 percent stake of the holding company. This, however, will depend on the approval of ELPE’s existing shareholders and, most crucially, prospective buyers.

All of ELPE’s exploration and production licenses have been transferred to this holding company as separate ventures. Though the Greek State will hold the right to appoint the holding company’s chief executive, the minority shareholder will decide on investment decisions through a veto right.