DESFA trio may return to DEPA Infrastructure sale, Italgas link-up seen

Italgas, one of six bidders through to the second round of a tender offering DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization, intends to join forces with Snam, Fluxys and Enagas, the three members of the Senfluga consortium that acquired a 66 percent of Greek gas grid operator DESFA late in 2018.

The trio of companies controlling DESFA had expressed first-round interest in the DEPA Infrastructure sale but failed to show up for the procedure’s second round.

Snam, head of the Senfluga consortium with a 60 percent stake, is associated with Italgas as it has held a 13.5 percent stake since 2016.

Italgas is widely tipped to emerge victorious in the DEPA Infrastructure sale.

Besides Italgas, the five other qualifiers through to the second round of the DEPA Infrastructure sale are: EP Investment Advisors; First State Investments (European Diversified Infrastructure Fund II); KKR (KKR Global Infrastructure Investors III L.P.); Macquarie (MEIF 6 DI Holdings); and the Sino-Cee Fund & Shanghai Dazhong Public Utilities consortium.

Once they have signed confidentiality agreements, the six qualifiers will receive second-round texts and access to a virtual data room hosting DEPA Infrastructure data and information.

Italy’s Snam, Italgas face off in DEPA Infrastructure sale

Snam, Italy’s gas grid operator, and Italgas, the neighboring country’s biggest natural gas distribution company, have emerged as rivals, despite sharing common interests, in a Greek privatization offering a full stake in DEPA Infrastructure, a new entity formed by Greece’s gas utility DEPA.

The Snam group holds a 13.5 percent stake in Italgas. Also, the two companies have a common key shareholder, CDP Reti, holding a 28.98 percent stake in Snam and a 26.05 percent share of Italgas.

The showdown between Snam and Italgas could end up leaving both bidders out of the DEPA Infrastructure privatization, whose deadline for first-round expressions of interest expires today following a slight extension.

The participation of both players in the DEPA Infrastructure privatization would represent a violation of the sale’s terms, privatization fund TAIPED has already pointed out following a related query.

Fully aware of the situation, Snam has sought a solution. The Italian firm could form another consortium as it had done for the sale of Greek gas grid operator DESFA. Snam led a consortium, Senfluga, joined by Fluxys and Enagas, for the acquisition of a 66 percent stake of DESFA.

Two major US funds, KKR and Blackrock, as well as Australia’s Macquarie, are among the field of players tipped to submit expressions of interest today. Two other funds, both undisclosed, one from China, the other from the Middle East, could also participate. Additional entries have not been ruled out.

Strong turnout seen for DEPA Infrastructure sale tomorrow

A solid build-up to tomorrow’s first-round deadline for a tender offering a full stake in DEPA Infrastructure, a new entity formed by gas utility DEPA, has indicated at least ten European operators as well as funds from beyond the continent will submit expressions of interest.

Snam, Fluxys, Enagas, Italgas, two major US funds, KKR and Blackrock, as well as Australia’s Macquarie, are among the field of players tipped to turn up.

Two undisclosed funds, one from China, the other from the Middle East, are also believed to be among the prospective bidders.

Candidates see DEPA Infrastructure’s investment plan as an opportunity for prospective synergies. Budgeted at 400 million euros, it envisions the development of a series of pipeline projects and other infrastructure in the wider southeast European region over the next five years.

Snam, Fluxys and Enagas, who formed a consortium named Senfluga to acquire a 66 percent of Greek gas grid operator DESFA in 2018, are expected to move independently for the DEPA Infrastructure tender’s first round, fearing antitrust regulations, before regrouping later on.

DEPA Infrastructure sale luring bidders, deadline Friday

The government and privatization fund TAIPED are expecting strong investor interest in the full sale of gas utility DEPA’s new entity DEPA Infrastructure, a procedure whose deadline for non-binding expression of interest expires this Friday at 5pm.

Authorities will not offer a deadline extension despite requests for more time, sources informed.

Italy’s Italgas, France’s Engie, Spain’s Reganosa as well as two major US funds, KKR and Blackrock, and, possibly, Australia’s Macquarie, are believed to be among the field of players eyeing the DEPA Infrastructure privatization. Senfluga, a consortium made up of Greek gas grid operator DESFA shareholders, is also considering participating in what should be a last-minute decision following related preparations.

Italgas, Italy’s biggest distribution network operator and third biggest in Europe, is believed to have held talks with fellow Italian company Eni for the acquisition of a 49 percent stake of gas distributor EDA Thess, covering the Thessaloniki and Thessaly areas. This stake is currently held by Eni subsidiary Eni Gas e Luce.

France’s Engie, also eyeing other opportunities in the Greek market, has partnered with Energean Oil & Gas and GEK-Terna with the intention of jointly bidding for an underground gas storage facility to be developed at a depleted offshore gas field in the south Kavala region.

TAIPED, the privatization fund, is offering DEPA’s 65 percent share in DEPA Infrastructure while Hellenic Petroleum ELPE is selling its 35 percent stake.

DEPA Infrastructure yield, 8.2% + 1.5%, a drawcard for bidders

Though not yet officially announced, a new annual regulated yield for distribution network operators, now set, represents one of the strongest drawcards for the sale of DEPA Infrastructure, a new entity established by gas utility DEPA for privatization.

Prospective bidders engaged in preliminary contact with authorities linked to the DEPA Infrastructure sale ahead of a February 14 deadline for non-binding expression of interest have been told the WACC figure has been set at 8.2 percent plus a 1.5 percent premium if certain investment objectives are achieved.

These objectives include swift network development in areas covered by gas distributor EDA, achievement of pipeline addition goals, specified in kilometers, as well as the development of projects not included in DEPA Infrastructure’s initial development plan.

Prospective participants, including funds, will enter this privatization procedure knowing their investment’s potential yield can reach 9.7 percent, far higher than WACC performances enjoyed by network operators in central Europe.

This higher yield offering has generated all-round optimism for a solid turnout by participants Friday week.

Potential bidders, so far, are believed to include Greek gas grid operator DESFA, France’s Engie, Italy’s Italgas and Germany’s Eon.

Besides European operators, the privatization is also expected to attract a number of funds, seen partnering with operators for the sale’s second round of binding bids.

DEPA Infrastructure has taken under its wings DEPA’s interests in the distribution networks of wider Athens (EDA Attiki), Thessaloniki and Thessalia (EDA Thess) and the rest of Greece (DEDA).

 

DEPA Infrastructure sale to be announced mid-December

Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

Italian energy firms eyeing array of local investments, PM in Italy

Italian investors are displaying widespread interest for energy investments in the Greek market, including possible stakes in distribution network operator DEDDIE/HEDNO, power grid operator IPTO, gas utility DEPA’s two new entities DEPA Trade and DEPA Infrastructure, as well as joint ventures in wind energy stations, electric vehicle projects and smart grids.

Deputy energy minister Gerassimos Thomas, joining Prime Minister Kyriakos Mitsotakis on an official visit to Rome today, is expected to be informed of this Italian investment interest. Thomas is scheduled to meet with Italian economic development minister Stefano Patuanelli.

The Greek Prime Minister, to meet with his Italian counterpart Giuseppe Conte, can also expect to hear of this Italian investment interest during talks which, besides the refugee crisis, will also address cross-border energy projects such as TAP and East Med.

Snam maintains the most emblematic of Italian investments in the Greek market at present with a 66 percent stake in gas grid operator DESFA, including control of the country’s natural gas transmission and storage infrastructure.

Italian firms are regarded as pioneers in a number of green-energy domains, including smart grids, electric vehicle recharging station installations along highways, even wave power projects.

Just days ago, a consortium comprising Eni, Fincantieri and Terna announced it would commercially develop its pilot project Inertial Sea Wave Energy Converter (ISWEC) for wave energy generation, initially at small Italian islands, followed by projects abroad.

The Greek Prime Minister and his energy deputy will also meet with Italian entrepreneurs, including Eni gas e luce chief executive Alberto Chiarini.

Italy’s Terna, one of Europe’s biggest transmission system operators, is believed to be interested in acquiring a stake of IPTO and its Ariadne subsidiary, project promoter of the submarine Crete-Athens grid interconnection.

Enel is considering moves into networks, renewable energy investments and the electric vehicles sector.

Italgas, Italy’s biggest gas distributor and the continent’s third biggest, appears interested in DEPA Infrastructure. Italgas is believed to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Eni, increasing its involvement in pioneering projects, including wave energy, is believed to be looking to increase its Greek market presence, possibly through acquisitions.

 

 

Italgas eyeing Eni’s 49% stake in EDA Thess, DEPA networks

Italgas, Italy’s biggest natural gas distributor, appears to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Though Eni maintains a favorable view of its business interests in EDA Thess, the retail-focused company’s involvement in networks is not its main international activity. EDA Thess is the sole gas distribution company in Eni’s portfolio.

Privatization procedures at Greek gas utility DEPA appear to have hastened the development. DEPA’s 51 percent stake in EDA Thess is set to be transferred to DEPA Infrastructure, one of two new entities, along with DEPA Trade, to emerge from a DEPA split ahead of the gas utility’s privatization.

The government is moving to privatize the Greek State’s prospective 65 percent in DEPA Infrastructure. The entire company may be sold if Hellenic Petroleum (ELPE), a 35 percent shareholder, joins this privatization.

Italgas is preparing to participate in the DEPA Infrastructure tender once it has acquired – if all goes well – Eni’s stake in EDA Thess, sources informed.

Eni gas e luce is awaiting Greek market developments and will then examine its options concerning the EDA Thess stake, including a possible sale, company officials have responded to media questions, without confirming any finalized deal.

Speaking to Reuters last week, Italgas chief Paolo Gallo informed the company intends to finalize a merger and acquisition agreement by the end of the year, or, possibly, in the first quarter of 2020.