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.

 

 

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, 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.

 

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.

 

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.