DEPA Trade

DEPA privatization revisions headed for parliament in October

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The energy ministry is preparing revisions to the previous government’s privatization plan for gas utility DEPA by the end of this month and will submit a resulting legislative amendment to Greek Parliament in October, sources have informed.

The government intends to offer investors majority stakes in DEPA’s trading and infrastructure departments, a departure from the preceding Syriza administration’s plan to offer a majority stake in the gas utility’s commercial interests followed by a minority share in infrastructure.

Energy minister Costis Hatzidakis has not ruled out structural changes to the Syriza plan, which entailed a DEPA split into two new corporate entities, DEPA Trade and DEPA Infrastructure.

It remains unclear if gas supplier EPA Attiki, covering the wider Athens area, will be merged with DEPA Trade or sold as a separate asset.

Speaking at the ongoing Thessaloniki Trade Fair, Prime Minister Kyriakos Mitsotakis noted DEPA would be included in the government’s first round of privatizations.

The DEPA sale is expected to generate major investor interest.

Also speaking at the Thessaloniki event, Andreas Siamisiis, chief executive at Hellenic Petroleum ELPE, the holder of a 35 percent stake in DEPA, declared the petroleum company would seek to establish majority stakes in the gas utility. The Mytilineos and Copelouzos corporate groups have also expressed DEPA interest in public comments.

 

Upcoming endorsement of new DEPA leadership first of 3 steps

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The privatization fund TAIPED’s anticipated approval, on August 30, of the new leadership at gas utility DEPA represents the first of three key step leading towards a new era for the company.

Earlier this month, Konstantinos Xifaras, a former managing director at gas grid operator DESFA, was named for the equivalent post at DEPA, while Giannis Papadopoulos, managing director at venture capital firm Attica Ventures, was announced as the gas utility’s new company president.

DEPA shareholders will immediately follow up with an extraordinary meeting to offer their approval of the company’s new two-pronged leadership.

Around the same time, a second key step is planned to be taken in the form of an amendment to be submitted to Parliament for a revision of the previous Syriza government’s DEPA split plan. It had envisioned the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure, as a prelude to the sale of a 50.1 percent stake in the former and a 14 percent stake in the latter.

The recently elected conservative New Democracy government appears determined to pursue a more aggressive DEPA sale policy that will offer majority stakes in both the utility’s trade and network interests. However, finalized decisions on a new company model, the third key step, have yet to be made.

ND, if elected, wants 65% DEPA sale, not split and sale

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The main opposition New Democracy party, if victorious in the July 7 snap elections, intends to privatize gas utility DEPA as one corporate entity, through the sale of a 65 percent stake, rather than through a split-and-sale procedure offering separate trading and infrastructure entities, as has been promoted by the ruling Syriza government, currently well behind in polls.

The role of Hellenic Petroleum (ELPE), holding a 35 percent share of DEPA, will be influential when the time comes to make decisions.

Up until now, ELPE has indicated it would be interested in acquiring a 65 percent stake of DEPA Trade – one of the two DEPA entities envisioned by the government for the utility’s split and sale – either alone or with Italy’s Edison, ELPE’s strategic partner.

However, ELPE’s main shareholder, the Latsis group’s Paneuropean Oil, holding a 45.5 percent share, could revise its stance if DEPA’s new sale procedure is redrafted from scratch, as would most probably be the case with a conservative ND election victory.

During a parliamentary debate in March, ND party representatives clearly opposed Syriza’s plan for a DEPA split, describing it as an unnecessary, excessive and complicated approach that would ultimately suppress DEPA’s market value.

The DEPA split, forged by the energy ministry, is not listed as a bailout term, but the country did commit itself to a reduced retail gas market presence for DEPA. This demand was met some time ago when DEPA withdrew from gas supply firm EPA Thessaloniki-Thessaly and acquired Shell’s stakes in EPA Attiki and EDA Attiki, respective supply and distribution firms covering the wider Athens area.

 

 

DEPA split all but over, next administration to pick new plan

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Legislation engineered by the energy ministry to split gas utility DEPA into two new entities, DEPA Trade and DEPA Infrastructure, as a prelude to a privatization procedure for both, appears to be all but over following the ruling Syriza party’s poor showing in last weekend’s European elections, which prompted Prime Minister Alexis Tsipras to announce snap elections.

The country’s next administration will need to pick a new model for this privatization.

Greece’s snap elections may take place on July 7 instead of June 30, the date originally planned, to avoid the process from coinciding with nationwide university entrance exams, scheduled between June 6 and July 2.

The energy ministry has made clear it will not take any further steps on any matters in its portfolio, including DEPA, during the run-up to Greece’s imminent elections.

Officials at the ministry have cited “political correctness” for not committing any subsequent government to pre-election decisions.

The main opposition New Democracy party, which outperformed Syriza by over 9 percentage points in Sunday’s European election and now appears set for an electoral victory at the upcoming national elections, has consistently disagreed on the necessity of the government’s split plan for DEPA ever since March, when the plan was tabled in parliament. ND officials have described the plan as complicated, unnecessary and ultimately damaging for the DEPA privatization.

The country’s series of bailout agreements have not included any terms requiring a split of DEPA’s trading and infrastructure divisions, an arrangement uncommon in many European countries.

Equality terms for DEPA Trade sale contenders being prepared

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A soon-expected tender for DEPA Trade, one of two new entities emerging from a company split of gas utility DEPA, is planned to include terms ensuring equal treatment for all contenders, including Hellenic Petroleum ELPE, whose 35 percent stake in the gas utility will not offer the petroleum group an advantage over rival bidders.

All contenders expressing an interest for DEPA Trade’s 50.1 percent will receive equal treatment, according to the plan.

The sale model to be applied will be shaped in accordance with a plan adopted for the sale of a 30 percent stake of Athens International Airport, sources informed. Canada’s PSP Investments, holding a 40 stake of the Athens airport, is expected to participate in the DEPA Trade tender.

ELPE is expected to seek bolstering its current DEPA stake for a majority stake of DEPA Trade.

The DEPA Trade tender’s terms are now in the making for an anticipated launch of the sale around late May, following the European elections.

ELPE has disclosed it is currently involved in talks with Edison, its Italian business partner in Greece’s electricity market, for a possible joint bid in the DEPA Trade sale.

Meanwhile, a follow-up sale for ELPE’s 50.1 percent, following the recent failure of an initial sale effort, is not expected any time soon.

Ministry, TAIPED to meet for ELPE, DEPA Trade sales

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The privatization fund TAIPED and the energy ministry plan to hold talks this week in an effort to clarify matters concerning the futures of the Hellenic Petroleum (ELPE) and DEPA Trade privatizations.

The privatization plan for DEPA Trade, one of two new entities emerging from a split at gas utility DEPA, is still unclear and will be greatly shaped by the stance at ELPE, holding a 35 percent stake in DEPA.

A government-backed recruitment plan involving DEPA’s sub-contracted external associates is another factor holding back the DEPA Trade privatization, to offer investors a majority stake.

Energy minister Giorgos Stathakis is believed to have held meetings last week with the administrations of DEPA subsidiaries to request swift recruitment procedures for these external associates by the end of the current month.

Matters concerning the DEPA business plan as well as the division of DEPA’s cash reserves to DEPA Trade and DEPA Infrastructure, the other new entity emerging from the company split, appear to have been finalized.

TAIPED could launch the DEPA Trade privatization by the end of this month if ELPE’s role is clarified soon, sources noted.

An initial ELPE privatization effort, offering investors a 50.1 percent share, failed to produce a result and has impacted the DEPA sale. The country’s lenders have requested alternatives from the privatization fund.

The Latsis group’s Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort. The Greek State offered 20 percent of its 35.48 percent share in ELPE.

ELPE has expressed an interest in DEPA Trade. The petroleum group is waiting for the sale’s terms to be finalized before it decides on whether to increase ELPE’s 35 percent stake in the natural gas company or sell its share and withdraw.

 

 

DEPA Trade tender launch likely within May, minister tells

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A tender offering investors a 50.1 percent stake of DEPA Trade, one of two new entities that have emerged from a company split at gas utility DEPA, could be launched within May, the country’s top energy sector authority has noted.

The prospect, expressed yesterday by energy ministry Giorgos Stathakis on the sidelines of an annual conference held by HAEE, the Hellenic Association for Energy Economics, has been confirmed by TAIPED, which expects to launch the tender some time during the latter half of the current month.

DEPA’s leadership has declared it is set for this step. Chief executive Dimitris Tzortzis expects a business plan for the natural gas utility’s commercial interests to be ready within the next week or two.

Sub-contracted external associates hired by DEPA on a regular basis and promised job security amid the company’s transformation will be transferred to DEPA subsidiaries – Attiki Natural Gas, EDA and DEDA – before ending up on payrolls, according to the plan.

A number of investors named by DEPA in the recent past as possible buyers are expected to be joined by US and UK funds, according to the company.

As for DEPA’s cash reserves, 110 million euros will be transferred to DEPA Trade and 70 million euros to DEPA Infrastructure, the other new entity emerging from the DEPA split.

Responding to reports claiming that a tender for DEPA Infrastructure could precede that of DEPA Trade – which would represent a turnaround in the order of events as they have been presented until now – Tzortzis, the gas utility’s head, said this is theoretically possible but would require a legislative revision.

Stathakis, the energy minister, and his associates are expected to hold talks during the current week on the next ownership steps to be taken for ELPE (Hellenic Petroleum), after a recent tender offering a 50.1 percent stake failed to produce a result. This failure has impacted the DEPA sale procedure as ELPE holds a 35 percent share of the gas utility.

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

 

 

 

 

ELPE, Edison talks for possible DEPA Trade joint bid at advanced stage

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Hellenic Petroleum ELPE and Italian business partner Edison have reached an advanced stage in talks on whether to jointly bid for a majority stake of DEPA Trade, one of two new entities that emerged from a recent split at gas utility DEPA.

Edison’s existing association with ELPE through electricity retail firm Elpedison makes the Italian company a clear favorite for a role as the petroleum group’s bidding partner for DEPA Trade.

However, if the two sides end up not joining forces for the DEPA Trade tender, ELPE will need to decide on whether to pursue this sale alone or seek an alternative partner, sources at the petroleum group told energypress.

Many details still need to be resolved for the DEPA split. The privatization fund TAIPED has yet to set a launch date for the DEPA Trade tender. Officials at the fund believe the procedure can commence in Maym even if some of DEPA’s split details are not completed this month.

On the other hand, pundits believe investors cannot seriously consider the DEPA Trade tender if the details of what exactly is being sold remain unclear.

DEPA’s shareholders have requested assurances that a DEPA board decision for a transfer of approximately 70 million euros to DEPA Infrastructure, the company split’s other new entity – the Greek State will retain a majority stake in this venture – as a bonus, will not undermine DEPA Trade or force this venture to seek credit solutions. Shareholders may even seek expert advice on whether DEPA Trade could face sustainability issues. Hellenic Petroleum ELPE holds a 35 percent stake in DEPA. The Greek State maintains a controlling 65 percent share through the privatizations fund.

Given the shareholder uncertainties, the DEPA board has promised to offer substantiated backing for its wider plan with support from consulting firm PwC before May 31. A general shareholders’ meeting needs to be held by this date for the DEPA split plan to be completed.

 

 

ELPE ownership decisions to be sought in coming days

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The uncertainty concerning the next steps to be taken for the future ownership of ELPE (Hellenic Petroleum) could become clearer this week as the country’s lender representatives pursue their post-bailout review in Athens.

The position to be adopted by the lenders on ELPE will be particularly important on how the matter plays out. They could insist on a privatization repeat for ELPE’s 50.1 percent following the initial effort’s failure to produce a result. If so, a relaunch would not take place until after this month’s European elections, and, almost certainly, the Greek elections, due in autumn.

Attracting investors during the pre-election period would be difficult to accomplish. ELPE’s privatization is not a market restructuring measure but is purely driven by cash-collecting incentives.

The Latsis group, whose Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort, wants to hold on to its stake in the listed petroleum company, according to sources. The Greek State offered 20 percent of its 35.48 percent share in the ELPE sale.

Energy minister Giorgos Stathakis has ruled out the possibility of any sale of the Greek State’s ELPE stake through the bourse.

The sooner ELPE’s future ownership is cleared up the easier it will become for authorities to push ahead with the privatization of DEPA Trade, one of two new entities that emerged from a recent split at gas utility DEPA. ELPE holds a 35 percent stake in DEPA.

The petroleum group, which has made clear its interest for a bigger role in Greece’s natural gas market, may seek to increase its DEPA stake.

Further details demanded for DEPA staff transfer plan

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Gas utility DEPA’s shareholders – ELPE (Hellenic Petoleum), holding a 35 percent stake, and the privatization fund TAIPED – have requested further details and criteria, in writing, to be applied by the utility for its personnel transfers to DEPA Trade and DEPA Infrastructure, two new new entities resulting from the company’s split in the lead-up to its privatization.

The shareholders want to know how DEPA intends to fill personnel voids expected to be created by the transfers.

DEPA officials and their consulting team, whose ranks includes PWC, are working on finalizing a personnel transfer plan whose board approval will be sought over the next few days. The company’s intention is to have settled the issue by the end of this week.

DEPA has announced it plans to transfer 60 percent of its staff to DEPA Trade, whose majority stake will be placed for sale, and 40 percent to DEPA Infrastructure.

This distribution ratio takes into account staff on the payroll as well as subcontracted associates offered regular work until now.

DEPA Trade to take on majority of DEPA staff emerging from company split

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Gas utility DEPA intends to transfer the majority of employees needing reappointment from a company split to DEPA Trade, one of two new entities resulting from the split, as its subjection to market competition will create greater personnel needs compared to the other resulting entity, DEPA Infrastructure.

The DEPA board plans to endorse this personnel transfer plan at a meeting scheduled for this coming Tuesday.

It is believed DEPA Trade will take on over 100 DEPA employees while DEPA Infrastructure will provide jobs for the remainder, numbering between 60 and 70, energypress sources informed.

These figures include staff currently on the DEPA payroll as well as sub-contracted associates offered regular work.

The majority of DEPA employees have expressed a preference for transfers to DEPA Infrastructure as this entity will remain under state control, viewed by the personnel as a safer job security option.

A majority stake of DEPA Trade is planned to be offered to investors through a tender. This privatization is a bailout requirement.

DEPA’s split procedure needs to be completed by May 31. All related accounting and personnel details must be finalized by next week.

All ELPE options, including no sale, to be considered, minister notes

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All options, except for a sale of the Greek State’s share in ELPE (Hellenic Petroleum) through the bourse, will be considered following last week’s failed sale attempt through a tender offering a 50.1 percent stake of the petroleum group, energy minister Giorgos Stathakis has noted.

Decisions will be made at a future date following talks with the country’s lenders and the Latsis group, whose Paneuropean Oil contributed 30.1 percent of its 45.47 stake to the tender, the minister noted. The Greek State was offering 20 percent of its 35.48 percent share.

The possibilities include dropping the ELPE privatization all together as this sale is not a structural measure or market revision but was added to the privatization fund TAIPED’s program for cash-collecting purposes, the minister explained.

Stathakis admitted he was expecting at least one worthwhile bid from the sale’s two bidding teams.

ELPE’s total worth could reach between 5 and 7 billion euros based on international business practices estimating the market value of companies by multiplying EBITDA results several times, the minister said.

Meanwhile, TAIPED is preparing to soon launch a tender offering a majority stake in DEPA Trade, a new entity emerging from a recent split of gas utility DEPA, the minister informed.

ELPE, holding a 35 percent stake in DEPA, has expressed interest in this sale as part of its plan for a natural gas market entry.

ELPE, seeking gas entry, wants majority stake in DEPA Trade

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ELPE (Hellenic Petroleum) is determined to bid for a majority stake of DEPA Trade, one of two new corporate entities emerging from a recent split of gas utility DEPA, as part of the petroleum group’s plan to enter the natural gas market, ELPE officials have reiterated just days after a tender offering a 50.1 percent stake of ELPE failed to produce a result.

The ELPE sale attempt’s failure has generated concerns for the ensuing DEPA Trade tender, scheduled to be announced on Monday, as ELPE holds a 35 percent stake in DEPA.

It is feared the lack of a result in the ELPE sale, offering a 50.1 percent stake, could unsettle investors eyeing DEPA Trade as more time will now be needed to find a strategic investor for ELPE, while even more time will be needed before this buyer decides on what to do with the petroleum group’s sizable stake in DEPA.

Some officials have even suggested a deferral of the DEPA Trade tender would be appropriate given the ELPE sale effort’s failure.

ELPE is determined to acquire a majority stake in DEPA Trade as the company wants majority control of the gas supplier, not a minor role, ELPE officials have made clear.

It is pointless to remain part of a company without controlling it and its management, as is the case at DEPA, where ELPE holds 35 percent, petroleum group officials have made clear from as far back as last year, when talks on DEPA’s privatization plan had commenced.

 

Imminent DEPA Trade tender affected by ELPE sale failure

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The failure of the ELPE (Hellenic Petroleum) sale effort to produce a result on yesterday’s bidding deadline day threatens to destabilize an upcoming privatization plan for the gas utilty DEPA, as ELPE holds a 35 percent stake in this utility.

A tender for DEPA Trade, one of two new corporate entities emerging from a recent DEPA split, is scheduled to be announced in just four days. A favorable development in the ELPE sale would have offered clarity for the DEPA Trade tender but, instead, the picture is now murky.

The ELPE sale’s failure to deliver a result means that, at best, several months will now be needed to find a strategic investor, while even more time will be needed before this buyer decides on what to do with the petroleum group’s sizeable stake in DEPA.

Given yesterday’s ELPE setback and the wider ambiguity this has caused, some officials noted that a deferral of the DEPA Trade tender would be appropriate. Launching this  tender amid the current conditions would be futile, they supported.

A relaunch of the ELPE tender, once again offering a 50.1 percent stake, a repeat  involving the Greek State’s stake only, or some sort of financial exchange rather than a tender, have been mentioned by pundits as three possible next steps.

 

ELPE, PPC among firms eyeing DEPA Trade majority stake

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The field of contenders believed to be examining a majority stake (50% plus one share) of DEPA Trade to soon be offered through a tender include Promitheas (Copelouzos, Gazprom), Motor Oil, Mytilineos and ELPE (Hellenic Petroleum), which revealed an interest in the natural gas market last week, while presenting group results.

The main power utility PPC another firm that has indicated it intends to enter the gas market to offset anticipated losses in the electricity market is another possibility. However, PPC’s financial standing and ability to access capital markets could prove to be an obstacle.

Promitheas has shown particular interest in DEPA’s international agreements, Motor Oil is looking closely at EPA Attiki, the gas utility DEPA’s supply firm covering the wider Athens area, while Mytilineos appears to be focused on the utility’s international trade and gas supply activity.

An energy ministry draft bill splitting DEPA into two new corporate entities, DEPA Trade and DEPA Infrastructure, ahead of the utility’s bailout-required privatization was ratified in Greek parliament late last week.

The tender offering a majority stake in DEPA Trade is expected to be launched in about one month. The privatization fund will not wait for the procedures concerning DEPA’s split to be completed before launching the DEPA Trade tender. Investors will be offered a minority stake in DEPA Infrastructure at a latter date.

 

Tender offering DEPA Trade majority to be launched April 8

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A tender offering a majority stake (50% plus one share) of DEPA Trade, one of two new corporate entities to emerge from gas utility DEPA’s split as part of its privatization plan, is expected to be launched on April 8, one month after tomorrow’s anticipated ratification of a related draft bill.

Investors will be offered a minority stake in DEPA Infrastructure, the split’s other new entity, at a latter date.

The privatization fund is now working on the tender’s documents, energypress sources have informed.

DEPA Trade’s minority for the Greek State will be transferred to the country’s privatization fund, according to the procedure.

The Greek State’s stake in DEPA Infrastructure, no less than 51 percent, will be handled by the energy ministry, according to the privatization plan.

Also, the transfer of DEPA Infrastructure’s minority stake will not be able to take place until procedures have been completed for the transfer of DEPA Trade’s majority stake.

 

 

Minister: DEPA hirings will be limited to full-time associates

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Gas utility DEPA hirings of workers currently subcontracted as associates will be limited to persons covering continual company needs, energy minister Giorgos Stathakis told parliament yesterday in response to recent reports contending he is preparing to have all of the utility’s 200 subcontracted workers added to the payroll.

Reports a fortnight earlier contended the minister had bowed to union pressure and, mindful of upcoming elections, was preparing to distribute the gas utility’s subcontracted workers to three gas utility supply and distribution subsidiaries as a means of bypassing ASEP (Supreme Council for Civil Personnel Selection) employment restrictions imposed by the bailout.

An upcoming DEPA privatization plan entails a split of the utility into DEPA Trade and DEPA Infrastructure, included in an energy ministry draft bill that has been submitted to parliament for a vote tomorrow.

DEPA’s overall payroll cost will remain unchanged through the new DEPA companies to emerge from the split, the minister also informed. This comment has troubled current DEPA staff members as it implies salary cuts will need to be made if some of the subcontracted associates are added to the payroll.

Preparations for the DEPA Trade and DEPA Infrastructure business plans began ten days ago and will be ready by April 10, it has been revealed. Staff decisions will need to be made by then.

DEPA staff to end up at DEPA Infrastructure – whose majority stake will remain under state control – will be comprised of employees at gas supplier EPA Attiki, covering the wider Athens area; DEDA, responsible for gas network development in regions not covered by the parent company; and DEPA’s infrastructure division. A voluntary exit plan will be offered prior to the split.

At DEPA Trade, whose 50.1 percent majority will be placed for sale, employees will be protected by a three-year job security plan.

 

 

 

State veto rights for DEPA Trade despite minority stake

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Investors preparing for gas utility DEPA’s upcoming privatization will face ambiguous operating conditions as the Greek State, to begin by offering a majority 50.1 percent stake in DEPA Trade following an imminent company split ahead of the sale, is expected to maintain veto rights on a number of strategic matters despite its minority status in this trade venture.

Key issues to concern DEPA Trade will include the gas utility’s long-term agreements with major suppliers such as Russia’s Gazprom, Algeria’s Sonatrach and Turkey’s Botas.

DEPA’s contract with Gazprom, which runs until 2026 and is the biggest of all three, features a take-or-pay clause requiring the Greek gas utility to order no less than 1.5 billion cubic meters of natural gas per year or face fines.

DEPA’s supply agreements with Sonatrach and Botas both expire in 2021. The Botas agreement will not be extended as the soon-to-be-launched TAP project will provide direct supply to Greece from Azerbaijan. DEPA has already signed an agreement for one billion cubic meters of TAP-related natural gas per year.

Subsequently, the Greek State will maintain its influence over DEPA’s supply contracts with Sonatrach and Gazprom.

Investors considering the majority stake to be offered in DEPA Trade will not be entirely free.

A draft bill for DEPA’s split into DEPA Trade and DEPA Infrastructure ahead of the privatization is scheduled to be submitted to parliament tomorrow.

A minority stake of DEPA infrastructure will be offered to investors at a latter date. The Greek State will maintain no less than 51 percent of this corporate entity.

Gas, electricity firms excluded from DEPA Infrastructure rights

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An energy ministry draft bill for gas utility DEPA’s split into two separate entities, DEPA Trade and DEPA Infrastructure, ahead of its privatization, includes a term excluding companies active in production or supply of natural gas or electricity in the Greek market from acquiring a controlling stake of DEPA Infrastructure.

The DEPA draft bill is scheduled to be submitted to parliament this Thursday.

Investors will initially be offered a majority stake (50% plus one share) in DEPA Trade, while a 14 percent stake of DEPA Infrastructure will also be placed for sale at a latter date. The Greek State will maintain no less than 51 percent of DEPA Infrastructure.

The draft bill does not include details of a controversial plan by the energy ministry to orchestrate hirings of 200 subcontracted external associates working for gas utility DEPA through a procedure that would skip bailout-related employment restrictions imposed on public sector enterprises. The ministry’s intention, seen as a pre-election favor, has troubled various authorities as well as investors.

 

 

Ministry’s DEPA hiring plan raises privatization concerns

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An energy ministry plan to orchestrate hirings of 200 subcontracted external associates working for gas utility DEPA through a procedure that would skip bailout-related employment restrictions imposed on public sector enterprises has swiftly raised objections on a number of fronts and troubled authorities over the move’s impact on the utility’s prospective privatization.

Company shareholders fear the currently profitable utility’s market value will be diminished as a result of these hirings, seen as unnecessary additions that will bloat the payroll and reduce DEPA’s operating profit levels.

Besides the shareholders, DEPA employees on the payroll have also reacted fearing these hirings could affect their interests.

The ministry, looking to hand out favors as this is an election year, is planning to hire the 200 subcontracted workers through three subsidiaries not subject to the bailout-related employment restrictions imposed on public sector enterprises.

These are gas supplier EPA Attiki and gas distributor EDA Attiki, both covering the wider Athens area, as well as DEDA, responsible for gas network development in regions not covered by the parent company. Head officials at these subsidiaries have also expressed concerns over the repercussions of the energy ministry’s recruitment plan.

The DEPA privatization, not expected to be launched before July, may end up being loaded onto the agenda of the country’s next administration.

DEPA will be split into two new entities, DEPA Infrastructure and DEPA Trade, for the privatization, to begin with a tender offering a majority stake (50% plus one share) in DEPA Trade. A 14 percent stake of DEPA Infrastructure will also be placed for sale at a latter date.

DEPA Trade sale launch not expected until early summer

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A tender to offer investors a majority stake in DEPA Trade, a prospective company to emerge from a split of gas utility DEPA into two entities, will not be launched until early in the summer, either in June or July, sources have informed.

A draft bill prepared by the energy ministry for DEPA’s split into DEPA Trade and DEPA Infrastructure ahead of the utility’s privatization will offer a three-month period from the time of its ratification for the establishment of the two new units, sources informed.

The draft bill is scheduled to be submitted to parliament on February 28 and should be ratified by early March.

Once the new firms are established, investors will be offered a 50.1 percent of DEPA Trade, while, at a latter date, a 14 percent stake of DEPA Infrastructure will also be placed for sale.

The draft bill’s details also include directions for a merger of DEPA and its EPA Attiki gas supply subsidiary covering the wider Athens area for the establishment of DEPA Trade. This new company will take on all of the gas utility’s wholesale and retail gas activities, as well as its international gas supply agreements.

The DEPA board has also commissioned a consulting firm to prepare a five-year business plan, a necessary inclusion into a data room to be made available to prospective DEPA buyers, sources informed.

Ministry preparing 200 hirings at privatization-bound DEPA

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The energy ministry is maneuvering to clear bailout-related employment restrictions imposed on public sector enterprises and facilitate the recruitment at privatization-destined gas utility DEPA of the majority of 200 workers currently subcontracted as external associates.

The ministry’s leadership appears to have bowed to worker union pressure, ensuring the hirings will go ahead, sources informed. If so, they would bypass ASEP (Supreme Council for Civil Personnel Selection) restrictions.

As a result, 150 workers subcontracted by DEPA would be distributed to three gas utility subsidiaries: the wider Athens area gas supplier EPA Attiki; distributor EDA Attiki, also covering the wider Athens area; and DEDA, responsible for gas network development in regions not covered by the parent company. All three can hire personnel without conforming to ASEP restrictions. A further 23 workers are currently subcontracted with DEDA and between 30 and 35 with CNG refueling stations.

New employees are expected to be offered individual work agreements. The duration of these agreements remains unclear.

An energy ministry DEPA draft bill scheduled to be submitted to parliament on February 28 and designed to split the gas utility into two entities, DEPA Trade and DEPA Infrastructure, ahead of its privatization, is not expected to include extensive details on personnel matters, including the ministry’s recruitment plan.

In addition, pay cuts are also planned for DEPA’s current staff on the payroll.

 

 

DEPA privatization draft bill set for parliament on February 28

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The energy ministry has been given a February 28 date for its submission to parliament of a draft bill designed to split the gas utility DEPA into two entities, DEPA Trade and DEPA Infrastructure, ahead of its privatization. This parliamentary move comes with slight delay as it was initially expected in December.

Investors will be offered a majority stake (50% plus one share) in DEPA Trade, while, at a latter date, a 14 percent stake of DEPA Infrastructure will also be placed for sale.

Having reserved an end-of-Febuary date for its DEPA draft bill, the energy ministry expects its ratification within the first five days of March. If so, the government will have fulfilled yet another bailout requirement ahead of an imminent Eurogroup meeting of eurozone finance ministers, scheduled for March 11.

The tender offering a majority stake in DEPA Trade should be launched within a month’s time of the bill’s ratification, according to the TAIPED privatization fund’s annual development plan. Given this schedule, the sale’s official announcement can be expected in early April.

One of the annual development plan’s next steps concerning the DEPA privatization entails ensuring veto rights for the Greek State, through its role in DEPA Trade, if extraordinary situations require intervention or any DEPA supply agreements – reached prior to the sale –  for gas quantities concerning PCIs be placed in any doubt. DEPA Trade’s portfolio will include the utility’s international gas supply agreements.

 

Early elections would devastate slow-moving DEPA privatization

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Gas utility DEPA’s privatization plan continues to be bogged down by delays and could be swept a lot further down the track in the event of early elections.

An energy ministry draft bill designed to split the gas utility into two separate entities, DEPA Trade and DEPA infrastructure, ahead of the sale, missed being submitted to parliament in December, as had been planned, then January flew by without any legislative action, while now, mid-way through February, a parliamentary date has yet to set.

The draft bill is apparently ready but the threat, to the privatization, of early elections cannot be ignored, officials told energypress.

According to the DEPA privatization plan, once the bill is ratified the corporation will need to be split into two corporations before the sale commences with a tender offering investors a majority stake in DEPA Trade. The DEPA Infrastructure sale, to offer a minority stake, is planned for a latter date.

Election-related delays of the privatization could affect the market value of the DEPA units, especially DEPA Trade, which would be deprived of regulated network revenues.

Meanwhile, authorities are preparing a five-year business plan that promises to serve as a key indicator for potential buyers when they determine the levels of their bids, sources informed.

Foreign players, namely European investors, have yet to display any interest in the prospective DEPA Trade entity, the sources added. However, any interest would be premature at this stage given the amount of work still needed before DEPA Trade is established.

 

Gas firm unions start strikes fearing privatization effects

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Workers at the country’s state-run gas companies, especially gas utility DEPA, are gearing up for widespread strike action as union representatives remain unconvinced various labor right demands will be settled following meetings with energy minister Giorgos Stathakis.

Union members want worker right assurances ahead of DEPA’s approaching privatization plan. These include a call for official hirings, on DEPA and gas grid operator DESFA company payrolls, of numerous staff members currently either maintaining sub-contracting associations with these gas companies or paid as freelancers through invoice booklets.

The unions also want authorities to drop a plan to offer investors a majority stake of DEPA’s commercial interests as part of the privatization.

According to the DEPA sale plan, the gas utility will be split into two companies, DEPA Trade and DEPA Infrastructure. Prospective buyers will be offered a majority stake in DEPA Trade, while, at a latter stage of the sale procedure, investors will be offered a minority stake of DEPA Infrastructure.

Panhellenic Energy Organization (POE) has called a 24-hour strike for today over the futures of DEPA’s external associates, numbering 150, whom they want added to company payrolls.

Union leaders also want salary protection measures for EPA and EDA supply and distribution subsidiary employees. Their remuneration arrangements are currently based on private-sector labor market rules. DEPA has agreed to acquire a 49 percent share of its EPA Attiki supply venture shared with Shell. According to sources, the rights of these employees will be protected for a period of at least one or two years following the company’s restructuring.

 

Energy authority’s DESFA certification paves way for sale’s completion

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RAE, the Regulatory Authority for Energy, has delivered its pending certification needed for the completion of a gas grid operator DESFA sale, giving Snam, Fluxys and Enagas, the winning bidding team, a 66 percent stake, sources have informed.

This move sets the stage for the transfer of DESFA’s 66 percent to the buying trio. RAE also approved the gas grid operator’s WACC figures at a board meeting yesterday.

Snam, Fluxys and Enagas, as well as their respective Italian, Belgian and Spanish embassies in Greece, had raised concerns over delays holding back the sale procedure’s final stage.

State privatization fund TAIPED is eager to complete the transaction, which will inject 251.3 million euros of the sale’s total amount of 535 million euros into its coffers. Hellenic Petroleum (ELPE), DESFA’s other shareholder, stands to receive 283.7 million euros.

TAIPED’s leadership regards the DESFA privatization as a success. A preceding sale effort, staged four years earlier, was cancelled to make way for a new attempt that ended up generating a higher sale price.

RAE has yet to endorse DESFA’s 10-year national gas grid development plan, submitted approximately a year and a half ago.

The privatization fund is now awaiting the energy ministry’s submission to parliament of a draft bill needed for gas utility DEPA’s split into two companies, DEPA Trade and DEPA Infrastructure, ahead of its privatization. The energy ministry plans to submit this bill in January.

DEPA intensifies debt hunt in preparation of split, privatization

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Gas utility DEPA is intensifying its collection drive for unpaid receivables in an effort to improve its standing ahead of an upcoming corporate split into two companies representing infrastructure and trade and the sale of a majority stake in the latter.

Debtors on the radar of what is seen as a challenging mission include industrial consumers ELFE (Hellenic Fertilizers and Chemicals) and EBZ (Hellenic Sugar Industry), as well as the OSY public transport operator, behind on its DEPA payments for the company’s fleet of LNG-fueled buses.

The main focus of DEPA’s collection effort is on large-scale consumers but smaller debtors will not be spared.

EBZ is believed to owe DEPA approximately 14 million euros, up from roughly ten million euros late in 2015. Despite the rise, DEPA has continued its gas supply to the sugar producer following demands for additional guarantees. EBZ, whose total debt figure exceeds 230 million euros, is up for sale but investor interest is subdued.

The OSY bus company, now under the control of Greece’s new super privatization fund, owed 24.4 million euros to DEPA at the end of 2017 but this figure is believed to have since fallen into single-digit territory.

ELFE remains a major problem for DEPA. The fertilizer and chemicals producer’s debt to the gas utility has risen to over 125 million euros. DEPA has taken legal action against ELFE on a number of fronts, including a recent demand entailing a detailed listing of all company assets.

 

Draft bill for DEPA’s sale-related split expected early December

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An energy ministry draft bill for public gas utility DEPA’s split into two companies, DEPA Infrastructure and DEPA Trade, as part of its privatization procedure, is expected to be submitted to parliament within the first ten days of December, following yesterday’s Competition Commission approval of the split.

The commission’s decision on the split, the final obstacle before stakes are offered to investors, may have come as relief to the energy ministry and DEPA’s board, but ministry officials, now penning the draft bill, remain undecided on jobs at the gas utility and its subsidiaries.

DEPA’s own team is not so much of a concern. The ministry’s job concerns are mostly focused on the futures of some 150 sub-contractors working on a virtually permanent basis with DEPA and associated firms.

According to sources, the majority of DEPA staff wishes to be transferred to the split’s resulting DEPA Infrastructure company, to remain under the control of the Greek State.

According to Greece’s 2019 budget, submitted to parliament yesterday, a 14 percent stake of DEPA Infrastructure will be privatized along with a 50.01 percent stake of DEPA Trade.

“The basic idea is to split the company into two parts, offer a majority stake of the commercial division to a strategic investor and maintain the Greek State’s strong presence in the distribution network,” energy minister Giorgos Stathakis told reporters.

Competition Committee ruling on DEPA-Shell deal by Monday

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The local Competition Committee is expected to deliver a decision Monday on gas utility DEPA’s agreement to acquire Shell’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area. DEPA already holds the majority 51 percent in these arrangements.

Motor Oil opposed the agreement and called for its rejection by the committee at a lengthy hearing held yesterday, while DEPA supported its takeover initiative. The committee informed it will issue its ruling by Monday.

Former DEPA chief executive Theodoros Kitsakos, who was replaced several months ago, noted that a better deal could have been achieved as it was prompted by Shell’s decision to withdraw from the Greek market, adding EDA Attiki sale was not a bailout requirement.

The sale price agreed to – EBITDA profit multiplied by 7.5 – is excessive, according to Kitsakos, who also condemned a clause requiring DEPA to pay Shell interest payments until the sale agreement is finalized.

A committee decision is needed for DEPA’s privatization procedure, involving a company split, to continue.

The privatization plan entails selling a 51 percent stake of DEPA Trade, representing the utility’s commercial interests, and a minority 49 percent of DEPA Infrastructure, as the government wants the Greek State to maintain its control of the country’s gas networks.