Gupta Family Group Alliance

ELPE privatization applicant’s disqualification appeal rejected

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An appeal made by a consortium comprising Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group, requesting a re-examination of its unsuccessful dossier submitted to the first round of an ELPE (Hellenic Petroleum) privatization offering a 50.1 percent stake, is believed to have been rejected by TAIPED, the state privatization fund.

The consortium, one of three not shortlisted for the second round of the ELPE privatization, forwarded a letter to TAIPED last week demanding an explanation, by this week, for its first-round disqualification.

Though the privatization fund has taken the consortium’s appeal into consideration, it does not intend to revise the shortlist, sources have informed.

In the letter, the two-member consortium argues that it should have been informed of any missing details in its dossier and given an opportunity to submit these before being disqualified.

Just two of five first-round applicants, Switzerland’s Glencore and Dutch enterprise Vitol, are believed to have met all of TAIPED’s criteria for qualification into the second round.

It remains unknown if the Carbon Asset Management-Alshaheen consortium will pursue legal action, at a domestic or European level, once it is officially informed of TAIPED’s refusal to offer the investment team a second chance.

According to sources, the two-member consortium was engaged in advanced talks with Socar for the Azerbaijani firm’s addition to the scheme if it made the second round.

In a short announcement made on July 3, TAIPED stated that three of the five applicants schemes, Carbon Asset Management-Alshaheen, Iraq’s Alrai Group Holdings Limited, and the Gupta Family Group Alliance, were disqualified for failing to meet all the criteria.

 

 

ELPE refinancing deal, timed with sale, could add some value

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A loan refinancing agreement between ELPE (Hellenic Petroleum) and its lender banks, reached a while ago but announced now, meaning it coincides with the petroleum firm’s ongoing privatization procedure offering investors a 50.1 percent stake, is expected to boost the firm’s market value.

ELPE’s refinancing agreement for existing loans, as well as the extension of new loans, worth a total of of 900 million euros, is expected to provide some extra incentive to investors taking part in the privatization.

ELPE has secured an interest rate of approximately 3.5 percent for its loans. The rate could have been lower, at approximately 2 percent, closer to European standards, had the country risk factor for Greece been smaller.

This highlights the potential benefits to be offered by ELPE’s incorporation into a larger international group. The development promises to lift the petroleum firm to a higher tier and enable it to utilize market opportunities emerging in the southeast Mediterranean on better financial terms.

ELPE’s agreement with banks covers all its capital needs until 2020 and will provide savings worth at least 20 million euros per year. This development relays a strong message to prospective investors, essentially being told that all financing issues at ELPE have been settled for the next two years.

Two of the ELPE privatization’s five first-round participants, Switzerland’s Glencore and Dutch enterprise Vitol, both leading oil traders on a global scale, are heavily tipped to advance to the next stage.

Expressions of interest also submitted by three other entrants – a consortium comprised of Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group; Iraq’s Alrai Group Holdings Limited and the Gupta Family Group Alliance – are not expected to be shortlisted for the second round as it is widely believed their dossiers do not meet all criteria. However, officials at TAIPED, the state privatization fund, have yet to reach final decisions.

Three second-round qualifiers would be preferable for the privatization’s bidding level prospects, pundits closely following the developments have noted, as a dual battle limited to Glencore and Vitol could subdue the sale price.

 

Glencore, Vitol the hot favorites for ELPE privatization shortlist

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Just two of five first-round ELPE (Hellenic Petroleum) privatization applicants, Switzerland’s Glencore and Dutch enterprise Vitol, seem set to advance to the next round of the sale, various sources agree.

Expressions of interest also submitted by three other entrants – a consortium comprised of Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group; Iraq’s Alrai Group Holdings Limited and the Gupta Family Group Alliance – are not expected to be shortlisted for the second round as their dossiers do not meet all criteria, reliable sources informed.

If this is confirmed, then Glencore and Vitol will be left to do battle for a 50.1 percent stake of the Greek petroleum firm, plus managerial rights. The sale’s second-round qualifiers are expected to be announced during the first week of July.

Though a greater number of qualifiers would increase the probability of firmer bidding, strong binding offers could still be submitted by Glencore and Vitol, the world’s two biggest oil traders.

Both have the financial strength to deliver bids of around 1.1 to 1.2 billion euros, the estimated worth of ELPE’s 50.1 percent. It remains unknown how much they would be willing to spend on the ELPE sale as the Greek refinery may be a domestic powerhouse but ranks as a small-to-medium sized player in the bigger international picture.

Once the privatization’s short list has been announced, qualifiers will gain access to ELPE’s data room. TAIPED, the state privatization fund, is aiming for binding bids to be submitted by early September. If so, a preferred bidder could be announced by the end of the year. The transaction is not expected to be completed until 2019.

 

At least 2 of 5 ELPE first-round bids may not meet sale’s criteria

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Two of five first-round expressions of interest submitted by investors to an international tender offering a 50.1 percent (at least) stake of ELPE (Hellenic Petroleum) may not meet criteria to advance to the procedure’s next stage, for which investors will be requested to submit binding bids.

Though appraisals of the expressions of interest have yet to be completed, officials are believed to be taking closer looks at dossiers submitted by a consortium comprised of Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group, as well as those submitted by Iraq’s Alrai Group Holdings Limited and the Gupta Family Group Alliance.

Expressions of interest submitted by two commodity traders, Switzerland’s Glencore and Dutch enterprise Vitol appear to be more favorably placed.

It appears that two bidding teams could be eliminated, while disqualification of a third would be an unfavorable development for the privatization’s sale-price prospects as bidding competition would be severely restricted, pundits closely observing the sale informed energypress.

Qualifiers are expected to be announced during the first week of July, meaning a deadline for binding offers will most likely be set for early autumn. If so, the preferred bidder will be announced towards the end of the year and the finalized sale agreement and transaction payment will not take place until 2019.

Though it is still too early to judge, Glencore and Vitol seem the strongest positioned at this stage.

Vitol sells 7 million barrels of crude per day and petroleum products to petroleum groups, multinationals, industrial enterprises, chemical industries as well as the world’s biggest airlines. Last year, the Dutch firm, founded in Rotterdam in 1966, supplied 349 million tons of crude and posted a turnover figure of 181 billion dollars. It maintains 40 offices in various parts of the world, the main branches being in Geneva, Houston, London and Singapore.

Switzerland’s Glencore, the ELPE sale’s other favourite, headquartered in Baar Zug, trades 6 million barrels of crude per day and refined products. Operating production facilities in Cameroon, the Republic of Chad and Guinea, Glencore also holds a 49 percent stake in the oil storage and logistics firm HG as well as a 10 percent stake in the Singapore-based refinery JAC.

 

TAIPED pushing for swift ELPE sale action, binding bids by July

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TAIPED, the state privatization fund, is pressuring all officials involved with ELPE’s (Hellenic Petroleum) bailout-required sale of a 50.5 percent stake to push ahead with fast-track procedures, the objective being to have a finalized and signed agreement with the new owner by the end of the year.

The privatization fund has ordered the sale’s advisers and all bureaucratic departments involved to move ahead with all necessary approvals concurrently rather than as a step-by-step process. TAIPED wants binding bids by prospective buyers in by the end of July.

Each step of the overall procedure will need to take no longer than an average of ten days if the sale is to move along at the pace demanded by TAIPED.

Expressions of Interest submitted by five investment schemes earlier this week will need to be appraised by next week.

Expressions of Interest were submitted by two of the world’s biggest commodity traders, Dutch firm Vitol and Switzerland’s Glencore; Alrai Group Holdings Limited; a consortium comprised of Carbon Asset Management DWC-LLC and Alshaheen Group S.A.; and Gupta Family Group Alliance.

Their dossiers will need to be appraised by next week and a shortlist of second-round qualifiers must be announced two weeks later. At this stage, qualifiers will also need to be granted immediate access to ELPE’s data room.

Then, a deadline for binding bids, within July, will need to be announced to keep the sale on schedule, as demanded by TAIPED.  Follow-up bids, already anticipated, will need to ensue swiftly. This would enable the privatization fund to announce a preferred bidder within the summer.

If all runs smoothly and this time frame is achieved, then the buyer’s dossier could be submitted to the Court of Auditors for approval in early autumn and followed by the signing of a share purchase agreement.

The agreement’s documents will then need to be submitted to the European Commission’s Directorate General for Competition for its approval. Once this step is completed, TAIPED and the buyer will be clear to sign a finalized agreement. Pundits believe this overall time frame can be achieved, even if it may seem too good to be true.

The ELPE privatization represents a complex procedure and the dossiers of prospective investors could require considerable appraisal time, as was the case with DESFA, the natural gas grid operator. This would delay the sale’s overall schedule. However, a greater number of final-round qualifiers would increase the likelihood of higher bids.

ELPE may be a formidable local force, but the refinery is not an industry powerhouse on a global scale. A greater number of final-round bidders would therefore increase the likelihood of a satisfactory sale price.

Five teams submit preliminary non-binding bids for ELPE sale

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Five investment schemes have submitted first-round Expressions of Interest to an international tender offering a 50.1 percent (at least) stake of ELPE (Hellenic Petroleum), the state privatization fund, TAIPED has announced.

Expressions of Interest were submitted by two of the world’s biggest commodity traders, Dutch firm Vitol and Switzerland’s Glencore, confirming a previous energypress report; Alrai Group Holdings Limited; a consortium comprised of Carbon Asset Management DWC-LLC and Alshaheen Group S.A.; and Gupta Family Group Alliance.

The deadline for non-binding offers expired yesterday following an extension of a previous May 18 deadline.

TAIPED’s advisors will now evaluate these Expressions of Interest and submit to the fund’s Board of Directors their recommendation regarding the candidates that qualify for the next phase of the tender.