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.

 

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.

DEPA set to appeal court verdict ordering ELFE refund

Gas utility DEPA is expected to submit an appeal by Wednesday challenging an Athens Court of First Instance verdict delivered in October that vindicates ELFE (Hellenic Fertilizers and Chemicals) for gas supply overcharging claims made against the utility.

The court ruling has ordered DEPA to return a sum of 63 million euros to ELFE for supply between 2010 and 2015 as a result of the application of a pricing formula used by Gazprom, pegging gas prices to international oil prices.

The Athens court ruled the pricing procedure should be based on formulas used by northern Europe hubs, which are not pegged to fluctuating international oil prices.

DEPA, in its appeal, will argue the pricing formula is not a local creation but, instead, used by Gazprom customers in the wider area such as North Macedonia, Bulgaria and Romania.

The gas utility, in its appeal, will also contend the Greek gas market, still isolated, cannot be compared to those of west and northern Europe as interconnected gas trading hubs operate in these regions.

The case could have wider ramifications for DEPA if ELFE is victorious because other  customers supplied by the Greek gas utility could emerge to dispute the Gazprom pricing formula and also request pricing revisions.

Also, if unsuccessful, DEPA would need to recalculate ELFE’s entire outstanding amount, currently worth 126 million euros.

DEPA, fearing ramifications, to appeal ELFE debt cut verdict

Gas utility DEPA will appeal an Athens Court of First  Instance verdict delivered two months ago that reduces debt owed by ELFE (Hellenic Fertilizers and Chemicals), by approximately 60 million euros, on grounds claiming the gas utility’s pricing formula is abusive as its gas prices are pegged to international oil prices.

The DEPA board, supported by the energy ministry, has decided to appeal the decision and has already passed on the case to a law firm, giving it the green light to proceed, energypress sources informed.

Without question, the amount of money at stake is significant but the case is made even more crucial by the possibility of wider ramifications for DEPA if its appeal fails as other major customers could also push ahead with gas overcharging claims and seek price reductions.

DEPA and the Greek government are determined to protect the gas company from any ambiguity that could result from the case as this could develop into a destabilizing factor for the gas utility’s approaching privatization.

Court overturns ruling requiring ELFE cash payments to DEPA

An Athens Court has overturned two preceding verdicts requiring the troubled ELFE (Hellenic Fertilizers and Chemicals) to make immediate payments to gas utility DEPA for gas supply. The latest ruling obliges the utility to continue supplying gas to the debt-laden producer in exchange for post-dated cheques of three months.

The court based its decision on an agreement reached in 2016 between former DEPA chief executive Theodoros Kitsakos and ELFE, permitting payments for gas supply through post-dated cheques.

As things have turned out, this older agreement continues to bind DEPA even though its former leader is facing criminal charges.

DEPA, which is owed close to 130 million euros by ELFE, has been involved in talks with major consultants for further legal action against the industrial producer.

The latest court verdict essentially offers protection to the failed businessman Lavrentis Lavrentiadis, the one-time majority shareholder of the liquidated Proton Bank who acquired ELFE in 2009 before morphing the beleaguered enterprise into various other ventures to evade financial responsibilities. Financial crime authorities have been monitoring ELFE developments.

More verdicts are expected in this saga as both DEPA and ELFE have filed a number of cases against each other.

DEPA in talks with Big Four for ELFE forced administration

Gas utility DEPA is currently engaged in talks with the professional services domain’s four biggest players, PwC, KPMG, Ernst & Young and Deloitte, as part of its preparations for new legal action against troubled ELFE (Hellenic Fertilizers and Chemicals), through which a forced administration request will be made.

DEPA is believed to be examining offers received from each one of the Big Four firms, as they are known, to act as administrators of ELFE, now owing close to 130 million euros to the gas utility.

Just days ago, an Athens Court of First Instance lifted temporary protection measures offered to ELFE, which had enabled the beleaguered producer to issue six-month post-dated cheques to cover DEPA gas supply since 2016, despite DEPA demands for cash payments, based on a decision by company shareholders.

The court verdict paves the way for DEPA to request that ELFE be placed under forced administration. This will enable an administrator to act in the best interest of creditors.

ELFE’s debt owed to DEPA has continued to rise as it is subject to a 7.25 percent interest creating additional amounts of approximately 200,000 euros per month.

 

 

DEPA court victory ends ELFE protection, enabling next steps

An Athens Court of First Instance has delivered a verdict favoring gas utility DEPA in its legal battle with troubled ELFE (Hellenic Fertilizers and Chemicals), lifting temporary protection measures offered to the industrial producer.

As a result, DEPA, owed 120 million euros by ELFE, can now proceed with its next steps in the dispute.

Making the most of temporary legal protection offered by a court in January, 2018, ELFE has continued issuing post-dated cheques to cover DEPA gas supply since 2016, despite DEPA demands for cash payments, based on a decision by company shareholders.

The DEPA board has just held an emergency meeting to discuss the next steps of its ELFE battle.

Financial crime authorities have been monitoring ELFE developments, including the emergence of various new firms related to the beleaguered producer. They include Ellagrolip and Lipasmata Neas Karvalis.

Acquired in 2009 by failed businessman Lavrentis Lavrentiadis, the one-time majority shareholder of the liquidated Proton Bank, ELFE has morphed into various other ventures.

DEPA took legal action against Lavrentiadis and his associates last December, prompting criminal fraud and criminal organization charges.

 

 

PPC in new payback agreement with ailing ELFE, owing €29m

An agreement reached between ELFE, the beleaguered Hellenic Fertilizers and Chemicals company, and the main power utility PPC, specifying payback terms for the former’s PPC-related debt – just disclosed at 28.6 million euros – and setting conditions for continued electricity supply, was approved by the power utility’s board just days ago, chief executive Manolis Panagiotakis has told Greek parliament.

ELFE is owned by the Lavrentis corporate group, headed by Lavrentis Lavrentiadis, a failed businessman who acquired the industrial enterprisse in 2009.

In the lead-up to the debt agreement reached by the two sides, PPC was empowered by a favorable court decision enabling it to disrupt its electricity supply to ELFE, which drew the fertilizer and chemicals producer to the negotiating table with proposals.

PPC initially rejected proposals forwarded by the Lavrentiadis team before its counter-proposals led to an agreement.

The PPC-ELFE agreement is expected to end an unusual payback arrangement enforced on PPC by a Kavala court in August, 2017. The verdict issued by the court in northern Greece required PPC to keep supplying electricity to ELFE and receive payments through Lipasmata Neas Karvalis (Nea Karvali Fertlizers), one of a number of associated enterprises established by ELFE’s owner.

Meanwhile, PPC is set to sign a new payback agreement with state-controlled nickel producer Larco that promises to keep the loss-incurring company afloat – for the time being, at least. Larco owes PPC over 300 million euros in total.

 

PPC set to issue Halyvourgiki €32m payment order

The main power utility PPC, on the front foot for solutions concerning its major-scale debtors, is preparing to issue a payment order to Halyvourgiki for a debt amount of 32 million euros after having already condemned the steel producer for breaching its agreement with the electricity corporation.

State-controlled PPC has ceased representing Halyvourgiki as an electricity supplier and, just weeks ago, criticized the industrial enterprise for having continued to benefit from lower-cost tariffs reserved for steel producers despite not having produced steel and related products since 2015.

PPC claims the Halyvourgiki company owner, the Aggelopoulos family, has, for years, leased the enterprise’s steel production plant, in Elefsina, west of Athens, to a third party for gas liquefaction purposes.

On another major debt front, PPC is believed to be close to reaching a payback program agreement with ELFE (Hellenic Fertilizers and Chemicals) for a debt amount of around 15 million euros.

In the lead-up, PPC was reinforced by a favorable court decision enabling the power utility to disrupt its electricity supply to ELFE, which drew the fertilizer and chemicals producer to the negotiating table with proposals.

A PPC-ELFE agreement would end an unusual payback method enforced on PPC by a Kavala court in August, 2017. The verdict issued by the court in northern Greece required PPC to keep supplying electricity to troubled ELFE and receive payments through one of a number of associated enterprises established by ELFE’s owner, the Lavrentis corporate group, headed by Lavrentis Lavrentiadis, a failed businessman who acquired ELFE in 2009.

Elsewhere, a debt agreement between PPC and state-controlled nickel producer Larco, a huge problem for the power utility, has yet to be found. A new payback program for a Larco debt amount of approximately 90 million euros accumulated since the most recent – yet ultimately unsuccessful – payback program established between the two sides is pending. Larco now owes PPC over 300 million euros in total.

Larco recently agreed to cut output by 20 percent. PPC holds an 11.45 percent stake in Larco, TAIPED, the state privatization fund, controls 55.19 percent, and the National Bank of Greece has a 33.36 percent stake.

Besides clamping down on major debtors, PPC is working on an industrial tariffs study demanded by the country’s privatization fund. It will aim to both maintain discounts and also introduce certain hikes, PPC’s chief executive informed yesterday without elaborating.

ELFE judicial administration, liquidation options considered

The government is considering two insolvency procedures for debt-laden ELFE (Hellenic Fertilizers and Chemicals), one being judicial administration, the other compulsory liquidation, based on the country’s bankruptcy law.

Both options were mentioned in parliament just days ago by two leading government officials, Deputy Prime Minister Yannis Dragasakis and Minister of State Alekos Flambouraris, but neither of the two offered any further details.

ELFE’s debt of 120 million euros owed to gas utility DEPA is complicating the utility’s privatization plan being pursued by the government and TAIPED, the privatization fund.

If a judicial administration procedure is to be pursued, then one of the troubled company’s creditors will need to take legal action at a Court of First Instance in Kavala, northern Greece, where the firm is headquartered, and request that the producer be placed under judicial administration. DEPA will need to come into the picture here.

If a compulsory liquidation procedure is to be chosen, then an investor that may be interested in taking over the company will need to be found. In this case, ELFE’s creditors, which besides DEPA, include banks, PPC and others, will need to agree on a debt haircut.

Meanwhile, disclosures are abounding as to how Lavrentis Lavrentiadis, a failed businessman who acquired ELFE in 2009, manipulated a variety of associated firms that emerged from 2015 – and were tolerated by the government – to run down the fertilizer and chemicals producer and render it incapable of servicing its mountain of debt.

Details of legal action taken by Alpha Bank against ELFE in 2016 for a 15.1 million-euro loan extended in 2008, with the Greek State as the guarantor, were submitted to parliament for discussion last Friday by the main opposition New Democracy party. ELFE has failed to service this loan.

 

DEPA intensifies debt hunt in preparation of split, privatization

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.

 

DEPA pressures ELFE officials to reveal all assets under oath

Representatives of troubled ELFE (Hellenic Fertilizers and Chemicals) will need to provide a detailed list of all company assets, under oath, or risk being arrested for inaccuracies or omissions, according to a court ruling prompted by legal action taken by Greek gas utility DEPA, owed 120 million euros by the industrial producer.

Acquired in 2009 by failed businessman Lavrentis Lavrentiadis, the one-time majority shareholder of the liquidated Proton Bank, ELFE, a run-down venture, has morphed into various other ventures, the most recent being Cypriot firm Revera Holdings, the intention being to avoid servicing debt. This series of firms has, more or less, shared the same headquarters, according to DEPA.

DEPA, backed by the court ruling, is now applying pressure on the Lavrentiadis team to disclose hidden revenues and assets linked with ELFE.

The gas utility took legal action against Lavrentiadis and his associates last December, prompting criminal fraud and formation of a criminal organization charges.

DEPA legal ordeal with troubled fertilizer producer ELFE still not over

An ongoing legal battle between DEPA, the Public Gas Corporation, and ELFE (Hellenic Fertilizers and Chemicals) as to whether the debt-laden industrial producer in Kavala, northern Greece, should keep being supplied natural gas by the corporation carried on at an Athens Court of First Instance yesterday. Both sides submitted their cases but a verdict is not expected for a few more months.

Until then, action by DEPA, threatening to cut gas supply to the producer, the government, or the Lavrentiadis corporate group, ELFE’s owner, cannot be ruled out.

A hearing that was scheduled to take place at a Kavala court on August 29 was relayed to the Athens Court of First Instance by the northern court after it decided it did not have legal jurisdiction for this particular case.

The Panhellenic Energy Organization (POE), Kavala Labor Center and chemical industry workers union group all testified against ELFE, which has cut jobs.

During yesterday’s hearing, riot police stationed outside the court throughout the hearing needed to intervene to stop clashes that broke out between former and current ELFE employees.

Early during the hearing, a marathon session, the court sought to establish a compromise agreement, following a proposal by ELFE, but the terms offered were rejected by both sides.

Last July, ELFE filed a case to the Kavala court in response to a decision by DEPA’s shareholders to demand cash as part of the prepayments by the producer for its weekly gas consumption instead of just postdated checks. The DEPA shareholders also called for debt-reduction measures against ELFE, which owes 110 million euros to the gas corporation.

ELFE responded by filing for security measures in a bid to keep issuing postdated checks for these payments, as the industrial producer has done over the past two years.

 

 

Gas supply cut for debt-ridden fertilizer producer ELFE

ELFE (Hellenic Fertilizers and Chemicals), struck by a third successive court rejection of an appeal filed by the debt-ridden company in an effort to secure temporary gas supply from DEPA, the Public Gas Corporation, had its supply line cut off as of Saturday, sources have informed.

An Athens Court of First Instance delivered the latest verdict against ELFE on Friday as a follow-up to two previous unfavorable court decisions on September 22 and October 4.

Once again, the General Confederation of Greek Workers (GSEE), Greece’s main private-sector union, as well as the Kavala Labor Center and the Panhellenic Energy Organization (POE) all testified in favor of DEPA, calling for maintenance of legality and transparency at ELFE.

In 2015, ELFE transferred its business activities and assets to a number of other companies, including Ellagrolip, PFIC and Nea Karvali Lipasmata (Fertilizers). Investigations, including money laundering probes, are currently in progress.

ELFE’s debt is believed to have reached 110 million euros.

DEPA ups payment pressure on debt-ridden ELFE with extrajudicial action

DEPA, the Public Gas Corporation, following up on a recent Athens Court of First Instance decision against debt-ridden ELFE (Hellenic Fertilizers and Chemicals), has applied further pressure on the industrial producer by taking extrajudicial action to demand 50 percent cash payments, beginning this Friday, for weekly gas orders or have its supply interrupted.

Last week, prior to this latest development, the Athens Court of First Instance rejected an appeal made by ELFE seeking temporary DEPA gas supply and the right to keep using postdated checks as payment for these orders.

DEPA’s extrajudicial step now places a demand on the ELFE board to honor a decision taken by the gas corporation’s shareholders last summer for weekly cash payments covering 50 percent of gas supply and provision of the remaining amount through checks issued by customers and non-related firms.

The snowballing judicial action has obviously hastened the previously slow developments concerning ELFE’s debt, now up to 110 million euros.

At this stage, one of two scenarios is possible. ELFE will either conjure up cash from some unexpected source and hand it over to DEPA or the industrial producer will be forced to stop operating, an inevitable prospect should DEPA stop supplying gas.

ELFE no longer controls any property assets which it could have offered as collateral for continued DEPA gas supply. Over a two-year period, the producer systematically unloaded property assets to other companies. Restrictions were imposed on these ELFE assets in 2014 as part of a money laundering probe.

 

Latest court verdict paves way for gas supply cut to troubled ELFE

An Athens Court of First Instance has rejected an appeal made by debt-ridden ELFE (Hellenic Fertilizers and Chemicals) seeking a temporary right to continued DEPA (Public Gas Corporation) gas supply and the ability to use postdated checks as payment for these orders.

The verdict paves the way for DEPA to stop supplying gas to ELFE, whose level of debt owed to the gas company has approached 110 million euros.

Last July, while the issue was being examined by a Public Prosecutor, DEPA’s two shareholders – TAIPED, the state privatization fund, and ELPE (Hellenic Petroleum) – demanded 50 percent cash deposits for future gas supply orders and a reduction of the troubled fertlizers and chemicals producer’s debt owed to the gas company.

ELFE reacted immediately by filing a legal case to a Court of First Instance in Kavala, northern Greece, which delivered a temporary decision ensuring continued gas supply to the industrial producer until legal proceedings were completed.

Then, on August 29, the Court of First Instance in Kavala, decided to make this decision stricter for ELFE by allowing the industrial producer to continue paying deposits for weekly natural gas consumption with postdated checks, as long as these checks are issued by ELFE customers, not the company itself or related companies.

Subsequently, DEPA’s legal team transferred the case to an Athens Court of First Instance, which delivered the latest decision rejecting ELFE’s appeal to keep using postdated checks as payment for DEPA gas supply.

It now appears that ELFE’s gas supply will be cut if the producer is unable to meet the DEPA demand for a 50 percent deposit on gas orders.

Quite a while ago, ELFE transferred its business activities and assets to a number of other companies, two of these being Ellagrolip and PFIC. Probes, including for money laundering, are now in progress.

 

Court imposes stricter DEPA gas payment terms on ELFE

A Court of First Instance in Kavala, northern Greece, has imposed stricter payment conditions on ELFE (Hellenic Fertilizers and Chemicals) for bank checks used by the industrial firm to cover DEPA (Public Gas Corporation) gas bills as a means of ensuring continued natural gas supply to the enterprise’s facilities in the northern city. ELFE’s overdue payments are believed to have now exceeded 106 million euros.

The court’s decision is temporary. A final ruling is expected in two months. ELFE took legal action seeking security measures that would enable continued gas supply.

The court’s preliminary decision essentially upholds a ruling issued on July 11 with certain revisions. As a result, ELFE maintains the right to continue prepayments of weekly natural gas consumption with postdated checks as long as these checks are issued by ELFE customers, not the company itself or related companies.

During yesterday’s hearing, ELFE’s legal team contended that DEPA is exploiting its dominant market position to impose elevated natural gas tariffs on the industrial enterprise. ELFE would be forced to shut down its facilities if DEPA ceased supplying the enterprise with natural gas as it would not have any other supply alternatives, the ELFE legal team claimed.

DEPA officials countered the argument, noting that the natural gas market is now liberalized, making other supply options available. DEPA warned that it could no longer take on the business risk of assuring ELFE’s continued operations as a result of the company’s growing arrears.