CVC Capital Partners

EBRD commits €75-100m for PPC equity capital raise

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Further highlighting the tremendous investor interest in power utility PPC’s equity capital raise, EBRD has signed to participate with capital of between 75 and 100 million euros, a move following a commitment by major fund CVC Capital to invest between 350 and 396 million euros for a 10 percent stake in the energy company.

The equity capital raise’s book building commences tomorrow with over ten institutional investors from abroad considered certain to participate.

CVC and EBRD have both signed agreements with PPC while a series of other interested parties have pledged to participate. These include Fidelity, Oakhill, Shroeders, Apollo, Bluecrest and Pictet.

Despite Blackrock’s extensive talks with PPC, as well as City and Goldman Sachs, coordinating the equity capital raise, this major fund may not participate for reasons not yet known, according to some sources. Until now, Blackrock’s participation was seen as certain.

The raise may attract as much as 1.35 billion euros, of which 85 percent, or 1.15 billion euros, is expected to be provided by foreign investors.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

PPC is striving to implement an ambitious 8.4 billion-euro investment plan by 2026.

PPC equity capital raise, early November, to reach €1.1-1.2bn

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Power utility PPC’s imminent equity capital raise, approved at yesterday’s general shareholders’ meeting and now set for the board’s approval, expected late October or early November, will inject a sum estimated between 1.1 and 1.2 billion euros into the company’s coffers, estimates have indicated.

Over the next ten days or so, PPC will continue promoting the equity capital raise to funds and institutional investors.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

To date, the value of requests submitted by investors ahead of the book building process, expected late this month, has reached nearly two billion euros, triple the equity capital raise’s initial sum of 750 million euros.

The PPC board plans to meet either October 29 or November 1 to decide on the level of the equity capital raise, seen exceeding one billion euros, and also to approve it.

The book building process, to immediately follow, is expected within the first ten days of November.

Small-scale company shareholders expressed complaints during yesterday’s session, troubled by the prospect of being completely overshadowed, but PPC’s administration responded by noting they were free to take part in the upcoming equity capital raise.

Major funds, including CVC Capital and Blackrock, are believed to have requested big stakes during lead-up talks with PPC officials, while the overall investor interest is high.

 

Big week for energy privatizations, approaching finales

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It is a big week for the country’s energy privatizations with gas company DEPA Infrastructure’s tender set to reach a concluding stage tomorrow and that of distribution network operator DEDDIE/HEDNO also approaching its finale as its binding bids are scheduled to be opened on Friday.

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, has, according to sources, submitted the highest bid in the DEPA Infrastructure sale, offering an 100 percent stake, and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by tomorrow.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

As for the privatization of DEDDIE/HEDNO, a power utility PPC subsidiary, four binding offers, for a 49% stake, have been submitted by major international funds CVC Capital Partners Group, First Sentier Investors Group, KKR Group, and the Macquarie Group. This level of participation could boost bid levels. Offers of over 1.5 billion euros, or even 1.7 billion euros, could be unveiled, sources have anticipated.

The rebounding economy, potential of Greece’s energy market, as well as the statures of all five suitors involved in the two sales could result in two of the country’s most lucrative privatization agreements, in all sectors.

Binding bids for HEDNO today, PPC sets ambitious target price

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The sale of a 49 percent stake in power utility PPC’s subsidiary DEDDIE/HEDNO, the distribution network operator, has reached the final stretch with at least three bidders in contention as the binding-bids deadline expires today.

US fund CVC Capital, as well as Australia’s Macquarie and First Sentier, are believed to be in the running, while the participation of KKR (Kohlberg Kravis Roberts & Co. L.P.) remains probable.

PPC’s administration is not expected to accept anything less than 1.5 billion euros for the subsidiary’s 49 percent, a price expectation based on DEDDIE/HEDNO’s book value, estimated at 3 billion euros.

The operator’s regulated earnings for 2021 to 2024 begin at 771 million euros and reach 798 million euros in 2024.

The financial offers by bidders are not expected to be opened today but will remain under wraps until all other details (legal, technical) of the offers have been fully examined.

Once the binding bids have been submitted, PPC will call an extraordinary general shareholders’ meeting for the sale’s approval. PPC’s objective is to have completed this partial privatization by the end of the year.

 

HEDNO bids confirmed Friday, sale price of over €1.7bn seen

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Just three days remain before claims, for some time now, concerning binding bids from three major funds in the 49 percent sale of distribution network operator DEDDIE/HEDNO can be confirmed.

US fund CVC Capital, as well as Australia’s Macquarie and First Sentier, are all believed to have submitted binding bids, while the participation of KKR (Kohlberg Kravis Roberts & Co. L.P.) remains uncertain. All will be confirmed this Friday.

More crucially, the bids will reveal whether the sale of DEDDIE/HEDNO’s 49 percent stake can exceed a price of 1.7 billion euros, as contended by bank and financing sources.

If these market projections are confirmed, the sale will be considered a resounding success as the DEDDIE/HEDNO stake will be sold at 1.18 times its Regulatory Asset Base (RAB).

According to a latest DEDDIE/HEDNO evaluation, assisted by professional services provider Grant Thornton, the operator’s total value is worth 2.95 billion euros.

 

At least four binding bids seen in HEDNO 49% privatization

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Four consortiums have been established involving most, if not all, of the nine participants through to the second round of a sale offering a 49 percent stake in distribution network operator DEDDIE/HEDNO, a subsidiary of power utility PPC, indicating that at least four binding offers can be expected, when these are submitted within August, sources monitoring the procedure have informed.

All nine qualifiers have been assessing DEDDIE/HEDNO’s technical and financial data, the sources said.

At its most recent session, PPC’s board approved a plan for the transfer of the group’s electricity distribution assets to DEDDIE/HEDNO.

Also, PPC has commissioned professional services company Grant Thorton for the asset evaluation process, expected in August.

The privatization’s nine second-round qualifiers are:

ARDIAN Infrastructure Funds

BCI – British Columbia Investment Management Corporation

BLACKROCK – BlackRock Alternatives Management, L.L.C

CVC Capital Partners – Advisers Company, S.a.r.l

F2i – Fondi Italiani per le Infrastructure SGR S.p.A

First Sentier Investors EDIF III GP S.a.r.l

KKR – Kohlberg Kravis Roberts & Co. L.P.

MACQUARIE Group Limited

OHA – Oak Hill Advisors LLP

HEDNO sale VDR now open to nine suitors, talks set to commence

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Potential buyers of a 49 percent stake in power utility PPC subsidiary DEDDIE/HEDNO, the distribution network operator, have been given access to the operator’s video data room after signing confidentiality agreements.

PPC is now set to stage separate meetings with the suitors, nine in total, over the next 30 to 40 days, for talks, observations and negotiations leading to the establishment of a sale and purchase agreement as well as a shareholders’ agreement.

The shareholders’ agreement will stipulate the role of HEDNO’s minority partner, which, as has already been revealed, will offer the eventual buyer reinforced managerial rights, including proposal rights for the operator’s chief financial officer and chief operating officer posts on the board.

Given the pace of preceding privatizations in Greece, talks with the suitors are expected to last until the end of June, while officials are aiming for binding bids to be submitted within September.

The privatization’s nine second-round qualifiers have already begun talks for possible partnerships, between themselves and beyond.

US fund CVC Capital Partners, whose Greek portfolio has continuously grown, investments including three hospitals, Metropolitan, Iaso General and Ygeia, as well as anticipated deals for food production conglomerate Vivartia, dairy company Dodoni and insurance company Ethniki Asfalistiki, is engaged in talks with fellow US fund KKR and Australia’s Macquarie for the establishment of a consortium, it has been reported for some time now.

HEDNO VDR opening Tuesday, bidders in partnership talks

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Power utility PPC plans to open a virtual data room concerning the sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator, on Tuesday, once confidentiality agreements with nine second-round qualifiers, and other documents, have been approved by the utility’s board, expected a day earlier.

All documents necessary for the sale procedure will be forwarded to the nine bidders for observations.

The VDR will offer bidders access to technical and financial data concerning DEDDIE/HEDNO.

As of next week, PPC and each of the nine second-round qualifiers, preparing to make binding bids, will begin separate talks, correspondence and negotiations that are expected to run for months, for the finalization of a shareholders agreement.

Given the width of second-round qualifiers, this privatization’s completion is anticipated towards the end of autumn.

The buyer’s board representation will reflect the minority 49 percent stake to be acquired, with 5 members on an eleven-member board, or 4 members if a nine-member board is chosen.

Some board members will be given reinforced managerial roles for the PPC subsidiary. Proposals for the chief financial officer and chief operating officer posts will be made by the buyer, according to sources.

Though the road ahead towards the DEDDIE/HEDNO sale’s completion is long, the nine second-round qualifiers have already begun talks for possible partnerships, between themselves and beyond.

One of the nine qualifiers, the US fund CVC Capital Partners – whose Greek portfolio is continuously growing, investments including three hospitals, Metropolitan, Iaso General and Ygeia, as well as imminent deal completions for food production conglomerate Vivartia, dairy company Dodoni, and insurance company Ethniki Asfalistiki – is engaged in talks with fellow US fund KKR and Australia’s Macquarie for the establishment of a consortium that would bid as one for a 49 percent stake in DEDDIE/HEDNO. KKR and Macquarie are among the nine second-round qualifiers in the DEDDIE/HEDNO sale.

HEDNO suitors all real-money investors with long-term views

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All nine qualifiers through to the second round of a tender offering a 49 percent stake of distribution network operator DEDDIE/HEDNO possess extensive experience in infrastructure management around the world and are long-term, real-money investors.

The tender’s shortlist, announced yesterday, includes Blackrock, the world’s biggest investment fund, back in the Greek picture after subscribing to a bond issue staged last month by the operator’s parent company PPC, the power grid operator.

Blackrock has based these investment decisions on Greece’s economic prospects beyond the pandemic as well as common business principles shared with PPC.

The capital managed by the nine qualifiers is worth 10.2 trillion euros. More importantly, the qualifiers are backed by formidable profiles, their portfolios carrying investments in utilities, infrastructure and energy companies.

France’s Ardian, managing assets worth over 100 billion euros, Canadian investment corporation British Columbia Investments (BCI), handling a 100 billion-euro portfolio, the American funds Blackrock, managing assets worth 9 trillion dollars, CVC Capital Partners (120 bn), KKR (250 bn) and Oak Hill (50 bn), Italy’s infrastructure fund F21, as well as Australia’s Macquarie (420 bn) and First Sentier (180 bn) are all long-term investors.

BCI and Macquarie have jointly engaged in a series of takeovers, beginning in 2012 with German networks company Open Grids Europe, and following up, in 2014, with US electricity firm Cleco, and networks company Endeavour Energy in 2017. BCI also controls Chilean power distributor Transelec as well as Canada’s Corix.

Blackrock controls US corporation Hearthstone Utilities and the UK’s Kelas Midtream and Calisen PLC, active in smart meters.

America’s KKR acquired New Jersey water management company Bayonne Water and Wastewater Concession in 2012 and Middletown Water in 2014.

Macquarie’s portfolio includes Spain’s Viesgo, Germany’s Open Grid Europe, and the portfolio of First Sentier (previously First State) includes the UK’s Electricity North West and Anglian Water.

HEDNO 49% privatization shortlist set to be announced tomorrow

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A short list of qualifiers through to the second and final round of a privatization offering a 49 percent stake of distribution network operator DEDDIE/HEDNO is expected to be announced tomorrow, when endorsed by the board of the operator’s parent company PPC, the power utility.

The qualifiers will be given access to confidential data stored in the tender’s video data room.

Though PPC has not offered details on the first-round participants, informing only that the bidders, eleven in total, are strategic investors, network infrastructure operators and funds, banking officials have leaked their identities, revealing the turnout of leading international investors.

They include US fund Blackrock, the world’s biggest investment fund, as well as fellow American funds KKR, Oak Hill Advisors and CVC Capital Partners, the recent buyer of insurance company Ethniki Asfalistiki.

One of Europe’s biggest funds, France’s Ardian, two Australian funds, Macquarie and First Sentier, Italy’s infrastructure fund F21, Canadian investment corporation British Columbia Investments (BCI), Chinese consortium China South Power Grid – China Three Gorges, and fellow Chinese firm Guangzhou Power make up the other seven first-round entries.

DEDDIE/HEDNO’s new business plan, covering 2021 to 2024 and carrying investments totaling 3.5 billion euros, is a key driver behind the considerable interest, as is a yield rate of approximately 7 percent offered by the operator.

Standout features of the operator’s new business plan include an 850 million-euro project entailing the installation of 7.5 million digital power meters around the country, whose tender is nearing; an addition, to networks, of fiber optics for telecommunication and 5G services; as well as projects for undergrounding, upgrading and modernizing networks in anticipation of mass investments in RES units.