DEPA Comm VDR open; 5-year stay for Infrastructure buyer

The video data room for the privatization procedure of DEPA Commercial, one of two new gas utility DEPA entities placed for sale, is now open to prospective bidders, but initial information made available is limited to non-financial details.

Financial details on DEPA Commercial will be made available as a second step to all consultants representing the potential buyers, while a third and final stage will follow to conditionally offer bidders confidential information in person at the DEPA headquarters.

As previously reported, the second-round, binding-bids deadline for the DEPA Commercial sale, offering investors a 65 percent stake, has been extended to March, 2021.

The field of second-round qualifiers is comprised of two partnerships, Hellenic Petroleum (ELPE) with Edison and power utility PPC with Motor Oil Hellas, plus Mytilineos, TERNA, the Copelouzos group, Shell, and the Swiss-based MET Group.

As for DEPA Infrastructure, the other new DEPA entity up for sale, energy minister Costis Hatzidakis is preparing a legislative revision that will require the winning bidder to retain its company shares for a period of at least five years.

This condition will also apply for the DEPA Infrastructure subsidiaries EDA Attiki, EDA Thess and DEDA, the gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively. DEPA fully owns DEDA and EDA Attiki and holds a 51 percent stake in EDA Thess.

The DEPA Infrastructure binding-bids deadline has also been extended to the end of February, 2021. Italgas, EPH, First State Investments, KKR, Macquarie and Sino-CEEF have qualified for the final round.

 

DEPA Commercial, DEPA Infrastructure binding-bid deadlines extended

The second-round, binding-bid deadlines for the privatizations of gas utility DEPA’s two new entities, DEPA Commercial and DEPA Infrastructure, have once again been reset for latter dates despite the government’s recent approval of privatization fund TAIPED’s revised Asset Development Plan.

According to sources, the new binding-bids deadline for DEPA Commercial, a privatization expected to draw major interest as a result of the company’s strong market standing and potential, has been reset for March, instead of December.

According to some sources, TAIPED wants to include improved DEPA Commercial results anticipated for the third quarter into the sale’s video data room, whose data will be assessed by prospective bidders once they sign confidentiality agreements.

TAIPED will, as a result, aim to achieve a higher selling price for DEPA Commercial, which has recaptured market share losses.

Other sources insist the rescheduled date is linked to an uncertainty felt by investors over DEPA’s ongoing legal dispute with ELFE (Hellenic Fertilizers and Chemicals).

A DEPA appeal of a court verdict that disapproved the utility’s pricing policy for ELFE is scheduled to take place in January, while a ruling will be delivered even later. Investors want clarity on this front before they can submit binding bids.

DEPA Infrastructure’s deadline for binding bids has now been rescheduled for February instead of January.

Pundits have attributed this development to a failure by RAE, the Regulatory Authority for Energy, to finalize a gas distribution network pricing policy by September, as had been planned. The authority has yet to offer a new date for the new network pricing policy, sources said.

Prospective bidders consider this pricing detail crucial as it determines the earnings level of DEPA Infrastructure.

 

PPC, going green, to present transformation plan on Monday

Power utility PPC’s new three-year business plan, to transform the company from a lignite-centered utility into a RES-focused enterprise backed by a range of modern and digital commercial services, will be officially presented on Monday by the state-controlled company’s board, headed by chief executive Giorgos Stassis (photo), with Prime Minister Kyriakos Mitsotakis in attendance.

A new company logo symbolizing PPC’s shift from lignite to renewables will also be unveiled at the event along with the launch of the motto “PPC welcomes the future”.

PPC’s trademark lightning bolt-bearing logo that has featured for years at the façade of the company’s Athens headquarters has already been removed to make way for the the new logo, to be unveiled at Monday’s event.

On the day, PPC will present details on its plan to develop a RES portfolio with a capacity of between 2,000 and 3,000 MW over the next three years. This effort will coincide with the utility’s phase-out of lignite-fired power stations.

The privatization plan for the forthcoming sale of a 49 percent stake in subsidiary DEDDIE/HEDNO, the distribution network operator, expected to begin towards the end of this year, will also be presented at Monday’s event.

So, too, will an abundance of new services, including house repair and maintenance insurance.

PPC’s new three-year plan, at its core, will aim for high profitability and an annual EBITDA figure of between 700 and 900 million euros. It will also detail the company’s interest in DEPA Commercial, a new gas utility DEPA entity headed for privatization.

On Monday, PPC will also offer an update on ongoing talks with investors, including Germany’s RWE, for the development of solar farms worth 1.2 billion euros in northern Greece’s lignite-dependent west Macedonia region.

Funds of between 500 and 550 million euros stemming from PPC’s securitization of unpaid receivables will be used to help finance RES investments. The company is also considering a bond issue for the end of the year. Funds to be raised through the prospective DEDDIE/HEDNO sale will also be used for these investments.

Sensing a bright future at PPC, a growing number of institutional investors and hedge funds from abroad are considering the company’s share. They include Allianz Global Investors, Bell Rock Capital, Helm Investment Partners, Bluecrest Capital Management, Polygon, Fiera Capital, Zenon and Prince Street Capital.

 

 

 

DEPA Commercial to enter RES field, starting with 200-MW goal

DEPA Commercial, the new entity emerging from gas utility DEPA, will enter renewable energy production as part of the company’s transformation from a gas to energy company, its administration has decided.

The firm has already held talks with green energy players with the aim of involving DEPA Commercial in solar and wind energy projects about to enter the construction stage or already being constructed, sources informed.

An initial objective for the accumulation of a green-energy portfolio comprising approximately 200 MW has been set by the company, sources added.

Careful steps are being taken in the RES sector, Dr. Konstantinos Karagiannakos, the company’s Coordinating Director of Trading Activities, recently noted.

Having lost a steady and reliable market share in gas distribution, a sector that guaranteed DEPA annual profit of about 25 million euros, DEPA Commercial is now eyeing new activities and revenues from domains that offer more consistency than trade, entailing higher risk.

Besides the RES sector, DEPA Commercial’s lower-risk approach has also led to an interest in the prospective Alexandroupoli FSRU in northeastern Greece.

The company is also broadening its activities to cover gas supply for the industrial sector and customers in areas without gas networks, through small-scale LNG and remote CNG solutions, as well as the gas-run vehicle market through the development of a nationwide network of refueling stations.

In addition, the company is also making plans to enter eco-friendly alternative fuel markets such as hydrogen and biomethane.

 

Business plan, better results, new activities in DEPA Commercial VDR

The virtual data room for a forthcoming privatization to offer a 65 percent stake in DEPA Commercial, an offshoot of gas utility DEPA, expected to be opened for potential buyers to assess by the end of this week, will present a business plan, improved financial figures at DEPA, new company activities envisaged, as well as DEPA’s outlook on the course of the country’s natural gas market and the company’s position within it.

According to privatization fund TAIPED’s revised Asset Development Plan, participants will submit binding bids in December.

The field of first-round entries, comprising two consortiums and five companies, will have roughly three months to prepare binding bids, according to the schedule.

Hellenic Petroleum ELPE and Italy’s Edison are one of the privatization’s two participating consortiums, the other formed by power utility PPC and Motor Oil Hellas. The five individual participants are: Mytilineos, TERNA, Copelouzos group, Shell and the Swiss-based MET group.

New partnerships could be established by the field of participants as long as they do not affect the sale’s competition standards and have been approved by TAIPED.

The sale of DEPA Commercial is a major attraction for potential buyers as it offers a big slice of the wholesale and retail markets, including gas supplier Fysiko Aerio Attikis, a subsidiary covering the wider Athens area. Fysiko Aerio Attikis already serves close to 400,000 households and 10,000 businesses.

DEPA Commercial VDR expected to open for bidders by end of week

A virtual data room offering financial and technical information concerning the privatization of DEPA Commercial, an offshoot of gas utility DEPA, will be opened to prospective bidders by the end of this week, sources have informed.

A final meeting between DEPA Commercial’s administration and privatization fund TAIPED may be staged today or tomorrow before the VDR is opened up for investors.

The sale of DEPA Commercial, expected to be fiercely contested by the country’s major energy players, should produce a result by December, according to an updated TAIPED schedule for its Asset Development Plan. This plan has already been approved by KYSOIP, the Government Council for Economic Policy.

A VDR for DEPA’s other privatization, DEPA Infrastracture, was opened in late August. Despite its earlier launch, binding offers are expected sooner for DEPA Commercial, whose conclusion has been scheduled for January, 2021 by TAIPED.

Well-informed sources have attributed this differing pace of schedules to a more complex sale procedure demanded for DEPA Infrastructure, requiring intervention by RAE, the Regulatory Authority for Energy. In addition, EU authorities will need to provide certification, needed for transfers of distribution networks and energy transmission systems.

For the time being, all of the country’s energy players are expected to gain access into the DEPA Commercial VDR as a first step before deciding on whether to place binding bids. Partnerships could be sought.

 

 

 

DEPA Infrastructure VDR open, DEPA Commercial data soon

A virtual data room has just been opened for the six bidding teams preparing to make second-round offers in the privatization of gas company DEPA Infrastracture, an offshoot of gas utility DEPA.

Czech company EPH, Italy’s Italgas, the Australian investment funds First State Investments and Macquarie, US firm KKR and China’s Sino-CEEF & Shanghai Dazhong Public Utilities now have access to all relevant data concerning the DEPA Infrastructure sale.

Another VDR is expected to be opened within the next few days for bidders participating in the privatization of DEPA Commercial, DEPA’s other entity up for sale.

The participants in this sale, seven entries in total, are: Motor Oil Hellas-PPC, ELPE-Edison, Mytilineos, GEK-TERNA, the Copelouzos group, Dutch company Shell and the Swiss-based MET Group.

VDR information for the DEPA Commercial sale will be made available over three phases as a protective measure intended to ensure competition. The first phase, offering non-sensitive data, will be open for all. Access to VDR information during the second stage, offering sensitive data, will be restricted to consultants. Bidders will be offered conditional access to confidential information in the third phase.

Greece’s privatization fund TAIPED is aiming to declare preferred bidders for both sales in the final quarter of this year. Market officials, however, believe this is more likely to occur in the first quarter of 2021.

DEPA Commercial bidders are allowed to team up and establish consortiums but partnerships for the DEPA Infrastructure sale are not permitted.

Bidders participating in the DEPA Commercial sale are mainly eyeing the company’s prized asset, retail gas supplier and subsidiary Fysiko Aerio Attikis, covering the wider Athens area. This company already serves close to 400,000 households and 10,000 businesses.

PPC triggers options for 2021 gas orders from DEPA, Prometheus Gas

Power utility PPC has activated options to extend, by an additional year, its 2020 gas supply contracts with gas utility DEPA and Prometheus Gas, a joint venture involving the Copelouzos group and Russia’s Gazprom, for respective gas orders of 2 million MWh and 2.5 million MWh, according to sources.

PPC expects to require a total gas amount of between 17 million and 18 million MWh for its electricity generation needs in 2021, unchanged compared to the estimate for this year.

A nine-year gas supply agreement between PPC and DEPA securing the power utility approximately 11 million MWh of gas, annually, expires at the end of this year. As a result, PPC will need to reshape its gas supply policy from scratch.

The gas supply prices secured by PPC through its aforementioned one-year contract extensions with DEPA and Prometheus Gas are roughly 8 to 9 percent lower compared to the prices of the power utility’s long-term agreement with DEPA.

The cost of PPC’s additional one-year gas order from DEPA is believed to be about 30 million euros, while the 2021 order from Prometheus Gas is estimated to be worth 36 million euros, sources said.

Early this year, PPC purchased additional gas amounts totaling 4.5 million MWh from DEPA and the Copelouzos group, through a competitive procedure, to primarily cover needs at its Aliveri and Megalopoli power stations.

PPC is also covering this year’s gas needs through supplementary LNG orders. The power utility has so far brought in three shipments of 2 million MW each, and may order a further 2 million MWh in the second half.

Natural gas market forecasts for 2021 remain hazy. RAE, the Regulatory Authority for Energy, has yet to determine the manner in which slots will be distributed at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens. In addition, the sale of DEPA Commerce, a new DEPA entity established for the gas utility’s privatization, is expected next year.

 

DEPA Commerce 5-year business plan includes turn to RES sector

Gas company DEPA Commerce’s five-year business plan for 2020-2024, containing investments estimated at 200 million euros, aspires to broaden the company’s interests by also incorporating renewable energy projects totaling 200 MW, either through independent development or acquisitions of mature plans.

Privatization fund TAIPED and the energy ministry are expected to approve the DEPA Commerce business plan within July.

DEPA Commerce was formed by gas utility DEPA as a new entity for its privatization procedure.

Besides RES projects, the DEPA Commerce business plan also includes hydrogen and biomethane projects, as well as electromobility initiatives.

The company’s expansion of business activities is expected to lead to greatly increased EBITDA and profit figures.

Once finalized and approved, the DEPA Commerce five-year business plan will be included in the due diligence package for prospective bidders.

DEPA Commerce sale may change gas, electricity markets

Ongoing procedures in the sale of DEPA Commerce could serve as a catalyst for major changes in the retail gas and electricity markets, leaving fewer players in these markets.

Challenges of the new era, from electromobility to renewable energy, are expected to soon lead to the establishment of various energy-sector mergers and partnerships in Greece.

Talks between company officials for potential partnerships have proliferated since seven consortiums were confirmed as the qualifiers through to the second and final round in the sale of gas utility DEPA’s commercial division.

Hellenic Petroleum (ELPE) chief executive Andreas Siamisiis, during a press conference yesterday, left open the prospect of an entry by an additional partner into the consortium formed by ELPE and Italy’s Edison. This consortium is among the sale’s seven qualifiers.

Such a development could even influence the line-up of electricity supplier Elpedison, a joint venture formed by ELPE and Edison for Greece’s retail market, Siamisiis admitted.

It is believed that fellow qualifiers Motor Oil and Greek power utility PPC, who also joined forces for the DEPA Commerce sale, are moving to expand their consortium for this sale.

Highlight the importance of the DEPA Commerce sale, and its potential to lead to sweeping changes, six major Greek energy companies are involved in the DEPA Commerce sale, a record level of interest for any local energy-market sale in recent years.

Besides the three aforementioned Greek players, Mytilineos, GEK-TERNA and Copelouzos are also vying for DEPA Commerce.

Electricity producers are the market’s biggest gas consumers, which entwines the interests of gas and electricity players.

Six Greek heavyweights among DEPA Commercial contenders

Six major Greek energy market players are among the contenders through to the second round of the DEPA Commercial sale, the biggest domestic turnout for an energy-sector tender in recent years, highlighting the gas market’s significance and prospects over the next decade.

The country’s energy transition plan is aiming for zero emissions by 2030.

Hellenic Petroleum (ELPE), joined by Italian partner Edison, a Motor Oil and power utility PPC partnership, Mytilineos, Gek-Terna and the Copelouzos group are the six Greek contenders, among a list of seven bidding teams shortlisted for the DEPA Commercial sale’s final round, entailing binding bids.

Gas utility DEPA, from which DEPA Commercial has been established for the utility’s privatization, may have lost its monopoly in the natural gas market, but its assets and market share promise the new owner a leading position during Greece’s decade of decarbonization, electric vehicle market growth and drastic reduction in fuel consumption.

As a result, fierce bidding for DEPA Commercial is expected.

The company’s acquisition will provide the new owner with a portfolio of 350,000 customers plus DEPA Commercial’s international supply contracts with Russia’s Gazprom, supplying pipeline gas to the Greek company for years; Algeria’s Sonatrach, supplying LNG; and Turkey’s Botas.

Gas quantities from Azerbaijan have also been reserved by DEPA Commercial via the imminent TAP route.

 

 

 

Seven bidders through to DEPA Commercial sale’s final round

The Board of Directors of the Hellenic Republic Asset Development Fund (HRADF), during today’s meeting decided, that seven interested parties meet the criteria to participate in Phase B (Binding Offers Phase) of the tender process for the acquisition of 65% of the share capital of DEPA Commercial (Trade) S.A., with an option of acquiring the total of its issued share capital by virtue of a Memorandum of Understanding (MoU) between DEPA S.A. shareholders, HRADF and Hellenic Petroleum S.A. (HELPE), the development fund has announced in a statement.

The prequalified interested parties to participate in Phase B of the tender are (in alphabetical order):

  1. C. G. GAS LIMITED
  2. Consortium HELLENIC PETROLEUM SA & EDISON INTERNATIONAL HOLDING N.V
  3. Consortium MOTOR OIL HELLAS CORINTH REFINERIES SA & PPC SA
  4. GEK TERNA SA
  5. MET HOLDING AG
  6. MYTILINEOS SA
  7. SHELL GAS BV

Following the signing of the relevant Confidentiality Agreement, the prequalified interested parties will receive the documents of Phase B (Binding Offers Phase) and will grant access to the virtual data room (VDR), where data and information related to DEPA Commercial S.A. are uploaded, the statement added.

 

 

 

 

DEPA sales progressing, DEPA Infrastructure VDR in a fortnight

Gas utility DEPA’s double privatization effort involving DEPA Infrastructure and DEPA Trade appears to be making progress.

The sale’s authorities expect to make accessible a DEPA Infrastructure video data room to prospective buyers between late June and early July. Then, approximately a month later, once a shortlist of final-round qualifiers has been announced, authorities plan to also open a VDR for DEPA Trade.

Meanwhile, DEPA has agreed to a new pricing formula with Russian supplier Gazprom, sources have informed.

The current pricing formula, indexing 40 percent of supply to the Dutch gas trading platform TTF, one of Europe’s biggest hubs, and 60 percent to oil prices, will be reversed.

DEPA and Gazprom also appear to have reached an agreement on an amount the Greek utility will need to pay its Russian supplier for natural gas not absorbed in 2019. A take-or-pay clause is included in their supply contract.

DEPA will pay a little over 40 million euros, well below a figure of 130,000 million euros believed to have been initially tabled. The take-or-pay amount that may result for 2020 remains to be discussed.

DEPA’s agreement with Gazprom is particularly significant for the prospects of the DEPA Trade privatization, as besides its retail gas market presence, this company will also pitch the details of its supply contracts as an important company asset.

DEPA Trade’s list of nine first-round bidders include Shell, which had sold its 49 percent share in EPA Attiki and EDA Attiki to DEPA in 2018 but is again interested in reentering the Greek gas market. The other bidders are: fellow-Dutch company Vitol; Qatar’s Power Globe; Met Holding, a subsidiary of Hungarian group MOL; C.G GAS; as well as four Greek bidders, Motor Oil Hellas with power utility PPC, a surprise partnership; Gek Terna; ELPE-Edison; and Mytilineos.

 

DEPA Trade sale short list this month, sooner than expected

Privatization fund TAIPED is expected to announce its short list of final-round qualifiers in a tender offering a stake of at least 65 percent, possibly even 100 percent, of DEPA Trade – a new entity formed by gas utility DEPA as part of its privatization – within the next few weeks, far sooner than expected.

Deteriorated international investment conditions have prompted fears of a slower sale procedure.

The privatization fund, now close to finalizing its appraisals of nine first-round bids, has requested clarification from participants.

The DEPA Trade privatization was expected to drag well behind that of DEPA Infrastructure, seen as a lower-risk sale effort offering investors regulated earnings, but the two privatization efforts now appear likely to move ahead almost concurrently, or a few weeks apart.

A list of six final-round qualifiers in the DEPA Infrastructure sale was announced a week ago. Authorities are aiming to complete this sale towards the end of the year.

As for DEPA Trade, this entity promises the winning bidder an immediate advantage in Greece’s natural gas market as more than 200,000 customers around the country will be gained.

DEPA Trade’s wholesale gas trading activity is another appealing factor, despite the fact that it shrunk to 40 percent of the market’s total last year, as the growing southeast European market offers huge potential.

DEPA Trade’s nine first-round bidders are: C.G GAS LIMITED; MET HOLDING AG; POWER GLOBE LLC; SHELL GAS B.V.; VITOL HOLDING B.V.; GEK TERNA; HELLENIC PETROLEUM (ELPE) & EDISON INTERNATIONAL HOLDING N.V. consortium; MOTOR OIL HELLAS & GREEK POWER UTILITY PPC (consortium); MYTILINEOS.

 

DEPA Trade, Infrastructure sales delayed for after summer

The final rounds of privatization procedures for DEPA Infrastructure and DEPA Trade, two new entities formed by gas utility DEPA to facilitate its sale, will be postponed until after summer as a result of the pandemic’s impact on global economic activity and investments, pressuring asset values, sources have informed.

Investors are being offered the Greek State’s 65 percent stake and Hellenic Petroleum ELPE’s 35 percent share of DEPA Infrastructure and DEPA Trade.

However, the privatization fund TAIPED, combining its efforts with the energy ministry and RAE, the Regulatory Authority for Energy, intends to press ahead with a June launch of a privatization procedure for a depleted offshore gas field south of Kavala planned to be developed as an underground gas storage facility.

An appraisal of first-round offers submitted by nine investment teams for DEPA Infrastructure and that many more for DEPA Trade is expected to be completed within June.

Barring unexpected developments, TAIPED should announce its list of finalists for both sales next month. This will be followed by the opening of a virtual data room facilitating due diligence procedures for both companies.

DEPA Infrastructure bidder shortlist expected end of month

A shortlist of second-round bidders for DEPA Infrastructure, a new entity formed by gas utility DEPA ahead of its privatization, is anticipated towards the end of May, while the cut for DEPA Trade bidders, the utility’s other new division being privatized, could be announced a month later, government sources have informed.

DEPA Infrastructure, whose earnings are regulated by RAE, the Regulatory Authority for Energy, is less vulnerable to the impact of the pandemic, which is not the case for DEPA Trade, fully exposed to market forces.

“We will not rush, for any reason, to take action that would lead us to much lower offers than the prices we are seeking,” Aris Xenofos, president of the privatization fund TAIPED, told Reuters yesterday.

Weighted Average Cost of Capital (WACC) levels set for network operators by RAE before the coronavirus crisis emerged offer protection to certain privatizations against the global economic uncertainty, government sources told energypress.

Though absolute safety can never be assured, DEPA Infrastructure, whose WACC level has been set at around 7 to 8 percent, is less susceptible to financial volatility compared to other companies on Greece’s privatization list.

DEPA Trade, Hellenic Petroleum ELPE, and power grid operator IPTO – its earnings are regulated but the company is listed through IPTO (ADMIE) Holding – are all far less resilient.

Motor Oil, PPC Renewables in talks for major wind energy park

Talks between PPC Renewables and the Motor Oil Hellas group for joint development, installation and operation of an island-based wind energy farm with a capacity of approximately 100 MW have reached an advanced stage, sources have informed.

The project’s feasibility, however, will depend on the development of a grid interconnection with the mainland system.

PPC Renewables and Motor Oil are currently examining details concerning the prospective wind farm’s sustainability, interconnection and financing. Once they have reached conclusions, the two sides will decide on whether to proceed with the project.

PPC Renewables and Motor Oil have already joined forces to express first-round interest in a tender offering a stake in DEPA Trade, a new entity established by gas utility DEPA.

PPC Renewables has set as a strategic objective the formation of partnerships with domestic and foreign players for new projects not included in the existing portfolio of parent company PPC, the power utility. PPC Renewables intends to develop these new projects without involvement by PPC.

The company’s wind energy park plan with Motor Oil could serve as a base for more projects involving the two sides.

PPC Renewables has already planned a series of collaborations with foreign partners, including Germany’s RWE, UAE group Masdar Taaleri Generation  D.O.O. (MTG), as well as EDP Renoveis, a Portuguese company with a Chinese main shareholder. PPC Renewables is striving to have developed RES projects with a total capacity of 1.5 GW by 2024.

Motor Oil has made clear its plan to broaden its portfolio with emphasis on green energy. The refining group wants to establish a solid presence in the renewable energy market through acquisitions and partnerships.

Motor Oil has already completed two acquisitions, a wind-energy purchase from Stefaner and a solar energy project acquisition from Metka EGN, a member of the Mytilineos group.

 

‘Firm steps for privatizations but pandemic’s impact considered’

Decisive steps are being taken for Greece’s energy-sector privatizations, representing two thirds of the country’s overall privatization program, but the pandemic’s impact on international markets will not be neglected, energy minister Costis Hatzidakis has pointed out in an interview with Greek daily To Ethnos.

There is no need to rush a plan to reduce the Greek State’s stake in Hellenic Petroleum (ELPE) as this sale is not one of restructuring character, the minister noted.

A government decision to sell stakes in DEPA Infrastructure and DEPA Trade, two new entities emerging from a split at gas utility DEPA, is moving ahead as planned, Hatzidakis informed.

First steps have been taken to reduce, below 51 percent, the Greek State’s share in power grid operator IPTO, “but this does not mean we will proceed tomorrow morning,” he said.

State-controlled power utility PPC is preparing terms of an international tender for the sale of at least 49 percent of distribution network operator DEDDIE/HEDNO, a subsidiary, the minister said. This procedure is scheduled to commence in the third quarter of this year, he added.

DEPA Infrastructure board soon, bidders shortlist in June

Corporate revisions at gas utility DEPA, shaped by legislation ratified in December, have just about been completed ahead of the enterprise’s privatization plan.

All that remains, according to sources, is an announcement of the board members at DEPA Infrastructure, one of the new corporate entities established as part of the utility’s transformation.

This announcement is expected to be made within the next one or two weeks. DEPA Infrastructure will be established as an entirely new company with its own tax file number.

DEPA Trade, another new entity emerging from the wider corporate revision, will succeed the existing DEPA utility.

The utility’s other division, DEPA International Projects will, for the time being, remain a subsidiary of DEPA Trade before it is broken away 60 days prior to the submission of bids for its parent company.

Then, as the final step of its process, DEPA International Projects will be merged with EDEY, the Greek Hydrocarbon Management Company, the government has announced.

Nine bidding teams that have expressed official interest for DEPA Infrastructure are currently providing data to the privatization fund TAIPED, expected to shortlist candidates around June, sources estimate.

Meanwhile, DEPA is preparing its video data room as well as financial and technical reports that will be examined and evaluated by investors before they shape their bids. DEPA is expected to complete these reports in May.

Ministry seeking to reignite stalled energy sector initiatives

The energy ministry is seeking to resume coronavirus-interrupted actions on a number of fronts, which, prior to the crisis, were expected to lead to major energy sector changes in 2020. These include the decarbonization effort, privatizations, green-energy infrastructure investments and a launch of the energy exchange.

The ministry’s strategic plan aiming to inject new impetus into these initiatives includes market liquidity protection through support mechanisms and bank loans for operators and key market players such as power utility PPC.

Efforts will also be made to accelerate decarbonization initiatives and keep alive pending energy sector privatizations, including those of gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade; the prospective sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a PPC subsidiary; as well as an underground gas storage facility at a depleted offshore gas field south of Kavala.

Green energy investments, a key party of Greece’s revised and more ambitious National Energy Climate Plan, are expected to regain dynamic momentum as of 2021, following this year’s pandemic-induced disruption.

This is also the case for major infrastructure projects such as power grid operator IPTO’s grid interconnections for Crete, the south, west and north Cyclades and other areas. These interconnection projects require investments totaling more than 4 billion euros. These are expected to be completed by 2030.

Grid interconnection projects are also being worked on for the gas sector. Gas grid operator DESFA is looking to expand its network to cover 39 cities.

IPTO, DEPA Trade, DEPA Infrastucture sales put on hold

Energy-sector privatizations planned for launch in the second quarter, as well as sales already in progress, are being put on hold as a result of the coronavirus pandemic’s impact on the global economy and the plans of the government and privatization fund TAIPED.

Two thirds of Greece’s privatization program this year concerns energy utilities, as energy minister Costis Hatzidakis has noted.

The freeze on plans includes the sale of an additional stake of power grid operator IPTO, which was planned for the second quarter.

State Grid Corp of China (SGCC), already holding a 24 percent share of IPTO and possessing first-offer rights, has expressed an interest to boost its stake.

However, IPTO and SGCC officials have not been able to meet for talks as a result of the extreme conditions. Greece’s deputy energy minister Gerassimos Thomas had planned a trip to China one-and-a-half months ago but was unable to travel as a result of a travel ban imposed by the Chinese government following the coronavirus outbreak in China early this year.

Two privatization procedures for gas utility DEPA’s new entities, DEPA Trade and DEPA Infrastructure, both of which have drawn considerable interest, have also been put on hold.

The DEPA Trade sale attracted nine bidding teams, domestic and international, for its first round, a turnout interpreted as a vote of confidence for the Greek economy. The sale’s first-round expressions of interest could be appraised in the summer.

DEPA Trade sale’s PPC-Motor Oil union, Shell return surprise

The privatization of DEPA Trade – a new entity established by gas utility DEPA – offering the Greek State’s 65 percent stake in a procedure whose deadline for first-round offers expired yesterday, produced two surprises. Firstly, Shell reemerged in the country’s gas market following a withdrawal less than two years ago. Secondly, in an unanticipated move, power utility PPC teamed up with Motor Oil for a joint bid.

Shell departed from the Greek natural gas market in July, 2018 by selling its 49 percent stakes in gas supplier EPA Attiki and gas distributor EDA Attiki, both covering the wider Athens region, to DEPA.

Shell received a total of 150 million euros, 39 million for its 49 percent stake in EPA Attiki and 111 million euros for its 49 percent stake in EDA Attiki.

The company’s reemergence can be primarily attributed to an interest in DEPA’s long-term contracts with Gazprom, Sonatrach and Botas, with an eye on the wider Balkan and southeast European regions, sources said.

PPC and Motor Oil decided to join forces for the DEPA Trade sale as a result of the failure of both to secure slots for 2020 at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens. PPC holds a 30 percent stake in its partnership with Motor Oil, sources informed.

Following its Revythoussa failure, PPC has been more aggressive in a market test for the Alexandroupoli FSRU, expiring today. PPC wants to secure a capacity at this prospective unit in the country’s northeast as the company is determined to have LNG access. A successful bid in the DEPA Trade sale would bolster this position.

Hellenic Petroleum (ELPE) and Edison did not submit a joint bid for DEPA Trade through Elpedison, their joint venture for Greece’s retail energy market, as had been speculated. Instead, they are believed to have made separate bids. The two had not shaped a common action plan in the event of a successful DEPA Trade bid, sources said. However, the establishment of a new joint venture by the two firms at a latter stage, specifically for DEPA Trade, cannot be ruled out.

The country’s planned privatizations, including DEPA Trade, face likely delays as a result of the coronavirus pandemic’s repercussions. The progress of these sales will depend on the course of the pandemic.

DEPA Trade’s first-round bidders forwarded their offers on-line and must follow up with deliveries of official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

DEPA Trade offers due today, at least 7 players interested

Five Greek and two international investment groups are expected to submit bids for the DEPA Trade privatization, whose first-round deadline expires today at 5pm.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

Bidders may also submit their expressions of interest online, via email, as a result of restrictive measures prompted by the coronavirus crisis, but will need to follow-up with official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

The local bidders expected to submits bids, all leading energy players, are Mytilineos, GEK Terna, Motor Oil, Hellenic Petroleum (ELPE) and the Copelouzos group.

ELPE plans to submit a joint bid in partnership with Edison, possibly through Elpedison, their joint venture for Greece’s retail energy market, sources informed.

The Copelouzos group is also working on delivering a joint offer, with Czech firm KKCG.

Shell is among the foreign companies looking interested, despite its sale, two years ago, of stakes in DEPA gas supply and distribution companies.

Dutch firm Vitol is the other foreign player believed to have been drawn to the DEPA Trade sale. Vitol had reached the final stage of an ELPE sale with Algeria’s Sonatrach as a bidding partner, but the pair ended up not submitting a binding offer.

Expressions of interest in DEPA Trade may also come from Swiss-based Hungarian firm Met Energy Holding, active in natural gas wholesale trade. This firm is already present in Hungary, Croatia, Italy, Serbia, Slovakia, Spain, Turkey and Ukraine. Qatar’s Power Global is another possibility.

DEPA Trade’s portfolio includes 409,000 customers – households and businesses.

 

No date change, at present, for DEPA Trade privatization effort

No further scheduling revisions are intended – at present – for the DEPA Trade privatization procedure, whose first-round deadline has already been reset for March 23, government officials have told energypress.

Officials at privatization fund TAIPED are concerned the coronavirus crisis could impact the sale and subdue bidding interest.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

The DEPA Trade privatization procedure can move ahead as planned because the aforementioned deadline has already been extended once and is non-binding, the energy ministry has contended, adding extension requests are limited to a very small number of investors.

Essentially, the ministry, and government as a whole, are determined to avoid any sale delays as this would reinforce the picture of a halt in economic activity.  The government sees the next fortnight as a crucial period for the coronoavirus preventive measures and economy.

Subdued interest by prospective bidders, including funds and consortiums, cannot be ruled out as Greece is still regarded as a high-risk market. These concerns also apply for the country’s two other upcoming major privatizations concerning DEPA Infrastructure and Athens International Airport.

 

Market slump a worry for DEPA Trade sale, gov’t holds firm

Privatization fund TAIPED and the energy ministry, already into the early stages of a sale offering the Greek State’s 65 percent of DEPA Trade, a new entity formed by gas utility DEPA for its privatization, are keeping a close watch on international markets, battered amid fears prompted by the coronavirus spread around the world.

The DEPA Trade sale, an emblematic energy-sector privatization, had already been given a first-round deadline extension for non-binding bids, until March 23, prior to the latest coronavirus-related market concerns. But the worsening international conditions, which prompted markets to plunge on Monday, have made the DEPA Trade sale’s officials far more vigilant.

Though an improvement of market conditions by the DEPA Trade privatization’s March 23 non-binding deadline cannot be ruled out, authorities are certainly  concerned for a number of reasons.

DEPA Trade does not offer investors secured WACC levels, as is the case with networks and infrastructure, including DEPA Infrastructure, power grid operator IPTO and distribution network operator DEDDIE/HEDNO. This absence of a fixed yield makes DEPA Trade’s value susceptible to international and domestic market turmoil.

Also, far lower LNG prices at present represent an unfavorable development for DEPA Trade as the company is committed to pipeline natural gas import agreements with take-or-pay clauses. This restricts the firm’s ability to choose.

In addition, investors, local and foreign, inevitably revise investment plans, or, at best, wait, when faced by overwhelming situations such as the coronavirus outbreak.

Furthermore, any market-slump period is not a good time to sell assets. Should markets remain unsettled for an extended period, the market value of DEPA Trade will be impacted.

The government plan remains unchanged, the DEPA Trade privatization still being at an early stage, energy ministry officials told energypress.

 

DEPA Trade sale threatened by unfinished ELFE pricing case

An unfinished legal battle between gas utility DEPA and ELFE (Hellenic Fertilizers and Chemicals), recently vindicated by an Athens Court of First Instance verdict calling for a 63 million-euro return from the gas utility for gas supply overcharging, threatens to block the launch of a privatization offering 65 percent of DEPA Trade, a new DEPA entity established for the privatization, despite strong investor interest.

The Court of First Instance decision in favor of ELFE, delivered four months ago, is a major blow for DEPA’s finances as the sum could potentially balloon if other firms follow the example set by ELFE and also take legal action, authorities have stressed.

The court ruled that DEPA overcharged ELFE between 2010 and 2015 by applying an oil-indexed gas pricing formula used by Russia’s Gazprom.

DEPA is expected to win an appeal as the utility is backed by a strong case, sector experts have pointed out.

If, however, ELFE ultimately proves these predictions wrong and wins the case then other companies supplied by DEPA, including electricity producers, would be prompted to take legal action of their own against the utility, taking advantage of the legal precedent. This would require DEPA to return sums worth hundreds of millions of euros, in addition to the ELFE amount.

Subsequently, the DEPA Trade sale cannot proceed with such ambiguity hanging in the air as prospective bidders will simply not turn up and submit binding bids if all is not clear.

Additional IPTO stake seen offered within next three months

The government, gearing up for a series of energy sector privatizations, plans to hasten the sale of an additional yet unspecified stake in power grid operator IPTO. The procedure could now be launched within the next three months.

Investor interest in IPTO has risen as the operator’s asset value is projected to increase sharply over the next decade.

The Greek State currently controls a 51 percent share of IPTO, directly and indirectly. Late in 2019, State Grid Corp of China (SGCC), the buyer of a 24 percent stake in IPTO and holder of priority rights should any additional stake be offered, expressed an interest to boost its stake in the operator and also acquire a 20 percent stake in subsidiary firm Ariadne Interconnector, project promoter of the Crete-Athens electricity grid interconnection, a project budgeted at one billion euros.

The size of the additional IPTO stake to be placed for sale remains unclear, but, without a doubt, SGCC’s decision on whether or not to exercise its priority right will be influential.

Italy’s Terna, holding a 30 percent stake in CDP Reti, an Italian holding company, is also believed to be interested in the upcoming IPTO sale. SGCC would also be involved here as the Chinese company holds a 35 percent stake in CDP Reti. French operator RTE and a variety of funds are also considered believed to be considering the IPTO sale.

IPTO’s assets are seen rising from a present level of 1.5 billion euros to five billion euros over the next ten years as a result of the development of major grid interconnection projects to link the country’s Dodecanese and North Aegean Islands with the mainland.

Greece’s energy-sector privatizations will not be limited to gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade, both underway, nor will there be a gap until the next sale, distribution network operator DEDDIE/HEDNO, scheduled for September, energy ministry officials have informed. The Hellenic Petroleum ELPE sale will be deferred.

 

‘DEPA key to Greece’s leading Balkan role, energy diversification’

Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

ELPE not on 2020 privatizations list despite priority status, unclear why

The schedule for the Greek State’s sale of its 35.47 percent stake in Hellenic Petroleum (ELPE) remains unclear despite this privatization being declared a priority by the New Democracy government immediately following its election victory last summer.

Speaking yesterday at an energy conference, Athens Energy Dialogues, energy minister Costis Hatzidakis offered a rundown of the government’s planned privatizations for 2020. ELPE was not on the list.

Signs of a slowdown in the ELPE plan emerged in early autumn when energy minister Costis Hatzidakis requested patience from investors for this particular sale. Ministry officials reiterated this call for patience yesterday.

Towards the end of 2019, the privatization fund TAIPED declared that its 2.4 billion-euro revenue target for 2020 would be achieved as a result of a series of planned privatizations.

TAIPED, at the time, included the ELPE sale on its privatization agenda for 2020, along with Athens International Airport and the two new gas utility DEPA entities, DEPA Trade and DEPA Infrastructure.

Some pundits have attributed the government’s ELPE delay to a decision by the Latsis Group, ELPE’s main shareholder with a 45.48 percent share, not to sell and not wish the entry of any new investor into the petroleum group’s equity make-up.

Certain industry experts have gone as far as to say that the ELPE privatization has been cancelled.

Others are attributing the ELPE sale delay to the launch of the DEPA Trade and DEPA Infrastructure privatizations. ELPE holds a 35 percent stake in DEPA and these new entities, established to serve the DEPA privatization.

Also, less favorable international conditions at present cannot be overlooked. Hatzidakis, the energy minister, has, from early on, been adamant on selling at the right time, when international conditions are at an optimal level.

Improved Gazprom deal raises DEPA in the eyes of investors

Lower-price deals sealed or about to be sealed between gas utility DEPA and its international suppliers are among the factors the government is relying on for a successful privatization procedure of the gas utility, a procedure launched yesterday, beginning with DEPA Trade, one of DEPA’s two new entities formed for the sale.

DEPA is believed to have renegotiated a far more favorable supply deal with Russia’s Gazprom, the Greek utility’s biggest supplier.

Forty percent of DEPA’s natural gas orders from Gazprom will no longer be pegged to fluctuating international oil prices. Instead, this percentage of DEPA’s Gazprom orders will be linked to price levels of Dutch gas trading platform TTF, one of Europe’s biggest hubs. Just days ago, prices at TTF were about half those of pipeline gas. The other 60 percent of DEPA’s orders with Gazprom will remain oil indexed.

This development promises to make DEPA’s supply deals with Gazprom far more competitive. Prospective bidders already appear to be warming to the prospect.

Major Greek corporate groups such as Mytilineos, Hellenic Petroleum (ELPE) – already holding a 35 percent stake in DEPA and considering teaming up with its Elpedison partner Edison for the DEPA sale – GEK Terna and Motor Oil are believed to be gearing up for bids. The Copelouzos group’s involvement in the DEPA Trade sale is considered certain – in a partnership with Czech entrepreneur Karel Komarek, holding a key stake in Greek lottery OPAP.