Power utility PPC appears to have reached an advanced stage in its negotiations with Italy’s ENEL for the acquisition of the latter’s Romanian subsidiary ENEL Romania, the various aspects of the deal said to be at price levels well below Greek market standards.
PPC’s offer for ENEL Romania’s retail division, for example, totaling approximately three million customers, results in a price of less than 90 euros per customer, which is less than half than the cost of recent corresponding acquisitions completed in the Greek market.
Mytilineos’ acquisition of Watt+Volt, an energy supplier with a portfolio numbering 200,000 customers, was worth 36 million euros, or 180 euros per customer.
The ENEL Romania deal’s price concerning networks is also being negotiated at a price level well below the cost of corresponding acquisitions recently completed in Greece. The price paid by Australia’s Macquarie for a 49 percent stake in Greek distribution network operator DEDDIE/HEDNO works out to 20 percent over the level being discussed between PPC and ENEL for ENEL Romania’s networks.
The same goes for the Romanian subsidiary’s renewable energy division. For example, Motor Oil acquired ELTECH Anemos for a figure twelve times its EBITDA, whereas the Romanian subsidiary’s RES portfolio is being negotiated at a price level of less than ten times its EBITDA.
PPC is negotiating a full acquisition of ENEL Romania for a takeover promising to expand the Greek utility’s interests in the Balkans, with the region’s fastest-growing economy as a base.
Power utility PPC, currently conducting due diligence for its planned acquisition of Italian energy group ENEL’s Romanian subsidiary ENEL Romania, has completed about 70 percent of the procedure, without issues, and could strike a deal within the next two to four weeks.
If the two sides do reach an agreement, PPC will fully acquire the Italian group’s Romanian subsidiary, a big move facilitating the Greek utility’s plan for expansion into the Balkan energy market with Romania, the region’s fastest growing economy, as a base.
An agreement between PPC and ENEL Romania would offer the former full control of ENEL Romania’s assets, regardless of the subsidiary’s varying stakes in network, supply and RES projects, ranging from 51 to 100 percent. ENEL holds the managerial rights to all its ventures in Romania, also included in the sale.
PPC officials have ruled out any chance of also expressing interest in ENEL’s interests in the Greek market. Asset prices in the Greek market greatly exceed those in Balkan markets, they explained.
An ENEL Romania deal would offer PPC three million customers in Romania as an addition to the company’s five million existing customers in Greece.
It would also offer PPC access to rich natural gas deposits in the Black Sea, while a Romanian venture would be supplied favorably-priced LNG arriving at Greek ports – currently via the Revythoussa islet terminal just off Athens and, in the near future, through a prospective FSRU at Alexandroupoli, northeastern Greece.
Two major deals expected to be struck early in 2023, barring surprise developments, namely Greek power utility PPC’s acquisition of ENEL Romania and Australian fund First Sentier’s takeover of TERNA Energy, promise to further internationalize the Greek energy market, reshaping it in the years to come through new opportunities and balances.
PPC’s completion of an agreement for ENEL Romania, a potential acquisition said to be worth between 1.3 and 1.4 billion euros, would open up the Balkans for the Greek utility and greatly increase the corporation’s size. ENEL Romania is roughly half the current size of PPC.
PPC and ENEL Romania’s parent company ENEL have signed a confidentiality agreement for exclusive negotiations ahead of due diligence.
As for TERNA Energy, the Australian fund First Sentier is believed to have completed its due diligence in November and reached a takeover agreement worth 2.34 billion euros.
According to sources, the Australian fund is now working on a financing agreement with Greek banks before finalizing the agreement.
If TERNA Energy’s share is sold at 22 euros, then the agreement with First Sentier could exceed 2.5 billion euros.
TERNA Energy’s investment plan for 2022-2029 is valued at 5.9 billion euros and includes additional RES installations of 5.5 GW, from 895 MW at present, the objective being to increase annual EBITDA to more than 700 million euros.
Power utility PPC has entered exclusive talks with Italy’s ENEL for the acquisition of the latter’s portfolio in Romania, a lucrative prospect offering networks in three Romanian regions, three million customers in the country’s retail electricity market, 550 MW in RES projects already operating, as well as 2,000 MW in RES projects at an advanced stage.
Completion of the deal would take PPC to another level and establish it as a regional force in southeast Europe’s energy market.
Market experts have put a price tag of between 1.3 and 1.4 billion euros on the possible deal.
Late last night, PPC and ENEL signed a confidentiality agreement obliging ENEL officials to only discuss a possible deal with PPC, which is conducting due diligence until January 23, in preparation for a deal that appears increasingly likely, as long as the two sides can agree on a price.
ENEL controls Romanian networks in the Muntenia region, surrounding Bucharest, the industrial zone of Timisoara, as well as Dobrota’s tourism section. The three networks offer a total capacity of 16 TWh.
Power utility PPC is up against strong competition from three major funds handling capital worth hundreds of billions of euros for the acquisition of Enel Romania, a subsidiary of the major Italian energy group Enel, sources have informed.
Enel Romania has been placed for sale as its parent company wants to reduce its net debt figure.
PPC has been scouring neighboring markets for almost a year now, looking for opportunities to expand beyond Greece and establish a geostrategic position in the region.
The southeast European energy market is attracting major international investment interest as Balkan countries have plenty of potential for RES growth and also promise to serve as a new energy corridor in Europe.
Canadian fund Brookfield, handling over 750 billion euros in capital and globally present with investments in renewables, infrastructure, real estate and social security funds, is believed to be one of the funds PPC is up against for Enel Romania.
The UK’s Amber Infrastructure, handling over 10 billion euros in capital, primarily in infrastructure, has been named as another potential buyer of Enel Romania.
Enel’s debt figure surged to 70 billion euros in September following energy crisis measures taken by the Italian government, an extraordinary tax, and increased natural gas orders for coverage of customer needs.
Enel aims to cut its debt by roughly 21 billion euros through the sale of assets in countries such as Romania, Argentina and Peru.