Italgas

Amendment to prioritize DEPA Infrastructure WACC level for ’23

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The energy ministry has prepared a legislative amendment to prioritize the setting of a WACC level for gas company DEPA Infrastructure in 2023, and, at a latter date, determine its allowed revenues and tariffs for the same year.

This legislative revision, ultimately covering DEPA Infrastructure’s latest four-year regulatory period from 2023 to 2026, will initially be applied to set levels for the aforementioned three parameters in 2023, an urgent need that has arisen as a result of the volatility in energy markets, especially the gas market, due to Russia’s ongoing war in Ukraine.

Prioritizing the 2023 WACC level for DEPA Infrastructure will enable Italgas, the company’s Italian buyer, to reassess its investment plans for the year concerning its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA. According to sources, Italgas is inclined to limit its investment plans for these subsidiaries in 2023.

Italgas is working on reviewing its overall corporate plan for DEPA Infrastructure in the light of an apparent downward revision of gas penetration targets for the end of the decade.

DEPA Infrastructure to gain investment clarity with revision

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The energy ministry is planning to allow Italgas, the Italian buyer of DEPA Infrastructure, through an acquisition completed last year, to adjust the gas infrastructure company’s investment and corporate plan in accordance with an anticipated downward revision of gas penetration targets to be set for the end of this decade.

The ministry plans to submit a related amendment to Greek Parliament, possibly as part of a multi-bill currently being discussed by a parliamentary committee ahead of its imminent tabling for ratification.

According to energypress sources, the amendment will remove an existing parameter simultaneously determining the WACC levels and allowed revenues of DEPA Infrastructure’s three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA, for the next regulatory period, covering 2023 to 2026.

This revision would pave the way for the average cost of capital concerning the four-year period to be determined first before regulated income is also determined.

The energy ministry’s legislative initiative, the same sources noted, comes following a request made by Italgas, so that the company may examine and establish its investment plan for the new four-year regulatory period based on WACC levels to be set until 2026.

The company’s investment plan will, as a result, be tailored to generate allowed revenues and lead to the creation of new assets.

 

Gas distribution operator 5-year investment plans worth €788m

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The country’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, have proposed investments totaling 788 million euros for the network’s development over a five-year period between 2023 and 2027.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

The three gas distribution operators have been forwarded their network development plans to RAE, the Regulatory Authority for Energy, for consultation.

DEDA, covering the country’s north, northwest, west, as well as the Peloponnese, has forwarded the biggest investment plan of the three gas distribution operators. It is worth 378.3 million euros and aims to increase the number of customers in these regions to 103,127 by 2027.

During this same five-year period, DEDA aims to develop low and medium-pressure distribution networks of more than 2,600 kilometers. This extension is expected to enable gas quantity distribution quantities of 4.7 million MWh for households and businesses in five years’ time.

EDA Attiki, covering the wider Athens area, has submitted a five-year network development plan budgeted at 159.59 million euros, its aim being to increase the number of customers to 531,939 from 430,147 at present.

EDA Thess has proposed a five-year network development plan for Thessaloniki worth 136.6 million euros for projects to include an additional 359.7 kilometers to the city’s distribution network, enabling an increase in the number of customers to more than 331,818 from 275,172 at present.

The EDA Thess network development plan for Thessaly is worth 113.9 million euros and expected to enable the number of customers in this region to reach 147,177 by 2027 from 118,512.

 

RAE approves EDA development programs covering 2022 to 2026

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RAE, the Regulatory Authority for Energy, has approved five-year development programs submitted by Greece’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, energypress sources have informed.

RAE is expected to soon publish these development programs, the sources noted.

The three operators have already submitted their ensuing five-year development plans, covering 2023 to 2027, to the authority, expected to offer its approval within the next two to three months, after two pending issues are settled.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

Italgas aims to increase total gas connections in Greece to a level of one million by 2028, from roughly 600,000 at present.

However, RAE has maintained a cautious stance as it wants to ensure these investments do not end up becoming an excessive burden for consumers.

 

RAE reserved about Italgas’ network expansion plan

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RAE, the Regulatory Authority for Energy, is deeply concerned about the prospect of gas distribution network expansions into new geographical territories as, at present, amid the energy crisis, it remains unclear whether an expanded network would result in a greater number of overall gas users in Greece or, on the contrary, excessively increase the cost of this fuel for existing gas users through higher charges on regulated tariffs.

Italgas, following up on its recent 733 million-euro acquisition of DEPA Infrastructure, one of Greece’s biggest energy-sector privatizations, is keen to expand the country’s gas network through three DEPA Infrastructure subsidiaries, EDA Attiki, EDA THESS and DEDA. The expansion project is included in their investment plans for 2022 to 2026.

RAE will soon need to decide on whether to approve these gas network expansion plans.

Italgas has made clear it views geographical expansion of the country’s gas network as am approach that will increase gas usage in the Greek energy market.

Italgas aims to increase the number of gas users in Greece from approximately 600,000 at present to one million by 2028.

 

Distributors bent on network expansion despite crisis

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Gas distributors EDA ATTIKI, EDA THESS and DEDA, unperturbed by the energy crisis, plan to expand the country’s gas network through the development of more than 3,000 kilometers of medium and low-pressure networks over the next four years, as well as digitization upgrades, investments worth a total of 740 million euros. RAE, the Regulatory Authority for Energy, has just forwarded the operators’ gas network expansion plans for consultation.

These investment plans demonstrate the willingness of all three gas operators to push ahead with their business plans for expanded gas usage as a key part of the country’s decarbonization effort, despite the sharp rise in gas prices.

Highlighting this intention, Italgas, whose acquisition of DEPA Infrastructure, the parent company of EDA ATTIKI, EDA THESS and DEDA, was completed one month ago, has just announced a loan of 580 million euros to be primarily used to help finance the gas network expansion plans of the three gas operators.

EDA ATTIKI, EDA THESS and DEDA cover the regions of wider Athens, Thessaloniki-Thessaly and the rest of Greece, respectively.

EDA THESS plans investments worth 233 million euros for new gas networks in the Thessaloniki and Thessaly regions.

EDA Attiki’s expansion plan for Athens, 570 km of low and medium-pressure networks by 2026, worth 122.23 million euros, will aim for 85,500 new connections by the end of 2026, taking the company’s total to 260,000 links.

DEDA Athens is planning over 2,000 km of new networks in seven regions, the biggest of the three initiatives, budgeted at 396 million euros.

 

Copelouzos in talks with Italgas for Depa Infrastructure stake of 10-20%

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Greece’s Copelouzos Group is interested in joining a new company founded by Italgas after acquisition of gas company DEPA Infrastructure was officially completed, the Italian buyer’s chief executive Paolo Gallo has informed media.

Italgas and Copelouzos Group are currently involved in talks concerning a stake of between 10 and 20 percent for the latter in the new DEPA Infrastructure company, a stake closer to the lower level being likeliest, Italgas’ CEO noted.

The negotiations between the two sides could last anywhere between weeks and months, while there is no definite outcome, Gallo informed.

Italgas intends to offer an overall stake of as much as 49 percent in the new DEPA Infrastructure company. No other potential partners or initiatives have been revealed.

Gallo, responding to journalist questions, said it is too early to tell if there will be any organizational changes at DEPA Infrastructure.

However, he did confirm that the current CEOs at DEPA Infrastructure’s distribution subsidiaries EDA Attiki and DEDA, two of three in total, would remain at their posts.

As for EDA THESS, DEPA Infrastructure’s other distribution subsidiary, Italgas is still in the process of completing its purchase of a 49 percent stake held in this company be Eni. Price and terms have been agreed.

Italgas will aim for further gas penetration in parts of Greece where natural gas networks already exist, the CEO noted.

 

DEPA Infrastructure sale hurdle overcome by ministry revision

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The energy ministry has incorporated provisions into a RES licensing simplification draft bill in order to overcome obstacles that have delayed the completion of gas company DEPA Infrastructure’s sale to Italian company Italgas.

The ministry’s provisions, now paving the way towards this sale’s finalization, separate certification requirements set by RAE, the Regulatory Authority for Energy, for the gas company’s distribution subsidiaries from the DEPA Infrastructure sale procedure.

RAE recently set terms that would essentially nullify certification for DEPA Infrastructure’s three gas distributors, EDA Attiki, EDA THESS and DEDA, if the buyer proceeds with an equity capital increase within three years of the sale’s completion.

Italgas officials have been in Greece since December, when the sale and purchase agreement was signed by the sellers, the Greek State and Hellenic Petroleum (ELPE), holding a stake, and the Italian buyer.

During this period, the Italgas officials have been collecting financial and other data concerning DEPA Infrastructure’s subsidiaries.

DEPA Infrastructure sale certification obstacles cleared

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Italgas, the Italian buyer of gas company DEPA Infrastructure, a deal yet to be finalized, has accepted certification terms set by RAE, Greece’s Regulatory Authority for Energy, for the gas company’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, a development that paves the way for the finalization of the sale, worth 733 million euros.

RAE has forwarded its decision on certification conditions for publication in the government gazette after clarifying terms, accepted by Italgas, Europe’s second largest gas distributor.

Italgas officials have been in Greece since December, when the sale and purchase agreement was signed by the sellers, the Greek State and Hellenic Petroleum (ELPE), holding a stake, and the Italian buyer.

During this period, the Italgas officials have been collecting financial and other data concerning DEPA Infrastructure’s subsidiaries.

DEPA Commercial sale over, DEPA Infrastructure completion June

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Privatization fund TAIPED’s attempted sale of gas company DEPA Commercial is officially over, the European Commission admitting that the procedure cannot proceed as a result of an ongoing legal battle between the company and fertilizer producer ELFE, which, Brussels noted, in a report on the Greek economy, is expected to take two to three years to be resolved.

ELFE is seeking compensation from DEPA, claiming overpriced gas supply between 2010 and 2015, while DEPA has filed a legal case seeking overdue amounts from the fertilizer producer, based in Kavala, northern Greece.

TAIPED is now examining alternative sale solutions, according to the Brussels report.

As for the yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, it is expected to be finalized in mid-June, the European Commission’s report noted.

The Brussels report made no mention of recent certification issues raised by RAE, the Regulatory Authority for Energy, which has changed its stance on the certification conditions for DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA.

DEPA Infrastructure sale facing hurdle on final stretch

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The yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, has encountered a hurdle on the final stretch as a result of certification issues raised by RAE, Greece’s Regulatory Authority for Energy.

The unexpected issues faced by this privatization, promising to provide 733 million euros to TAIPED, the country’s privatization fund, are serious and threaten to derail a sale and purchase agreement signed last December by the two sellers, the Greek State and Hellenic Petroleum (ELPE), and the Italian buyer.

The sale’s procedure had progressed swiftly, leading to competition committee approval, but events over the past few days, instigated by RAE’s change of stance on the certification conditions of DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, have suddenly led to confusion, bringing the sale to a standstill.

RAE has offered conditional certification for the three subsidiaries, setting terms that did not exist in the lead-up to the sale and its conditions, according to sources.

Consequently, certification offered to the subsidiaries will not be considered valid if the buyer proceeds with an equity capital increase within three years of the DEPA Infrastructure sale’s finalization. Also, the agendas of all three subsidiaries will need to remain unchanged for their certification to remain valid, according to the sources.

TAIPED officials are believed to have been angered by these initiatives, considering them to be beyond RAE’s authority. Officials at Greece’s finance and energy ministries, as well as Italgas, have also been annoyed by RAE’s decision.

TAIPED and Italgas officials are believed to be engaged in talks in search of a compromise solution.

 

DEDA: Framework ‘pending’ for biomethane, hydrogen

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Procedures leading to the establishment of legal and regulatory frameworks needed for commercial utilization of biomethane and hydrogen need to be accelerated by the government and the regulatory authority, Marios Tsakas, chief executive of gas distributor DEDA, has stressed in an interview with energypress.

Greece, from a technical and technological point of view, is ready to move ahead in the biomethane and hydrogen domains, the DEDA official pointed out.

Two pilot projects carried out by the company could develop into twenty mass-production projects if the pending legal and regulatory frameworks are completed and authorities give the green light, Tsakas noted.

The DEDA chief executive expressed optimism on the prospects of natural gas, noting that wild price fluctuations amid the energy crisis do not diminish the strategic advantages offered by this fuel, which can contribute significantly to reduced energy cost.

DEDA is preparing for the Greek market entry of sector giant Italgas, which has acquired gas company DEPA Infrastructure, Tsakas noted, adding that the arrival of this new investor, possessing enormous expertise of over 100 years in the natural gas sector, will lead to further growth that will benefit DEDA.

“We are network operators and, therefore, must be able to respond efficiently and responsibly, whether we are talking about pure gas networks or a mixture of gas and hydrogen, or biomethane,” Tsakas remarked.

 

Italgas’ DEPA Infrastructure deal to be finalized late March

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The sale of gas company DEPA Infrastructure, acquired by Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is expected to be completed in the first quarter of the year, energypress sources closely monitoring the procedure have informed.

Final sale procedures will have been completed towards the end of March, enabling Italgas to make its payment, an amount of 733 million euros, the sources noted.

The competition committee needs to approve the sales and purchase agreement, signed between the buyer and two sellers, privatization fund TAIPED and Hellenic Petroleum ELPE, on December 10, 2021.

RAE, Greece’s Regulatory Authority for Energy, also needs to issue necessary certification for the acquisition, but the competition committee’s approval is a prerequisite for this stage.

The acquisition will be fully completed once Italgas also purchases purchase gas distributor EDA THESS’s 49 percent stake held by Italy’s Eni gas e Luce, wanting to sell. This follow-up purchase of the EDA THESS stake has been set as a condition for Italgas, the winning bidder.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Eni gas e Luce, holds 49 percent.

The overall sum expected to be spent by Italgas for DEPA Infrastructure and EDA THESS’s 49 percent stake is expected to reach 940 million euros.

Then, Copelouzos group subsidiary Faethon is expected to enter DEPA Infrastructure with a stake seen ranging between 10 and 20 percent

Italgas and the Copelouzos group had reached a related agreement on this minority-stake arrangement prior to the DEPA Infrastructure tender.

Copelouzos group enters DEPA Infrastucture alongside Italgas

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The Copelouzos Group is set to acquire a minor stake in Italgas’ 100 percent acquisition of DEPA Infrastructure, to be completed tomorrow when Italgas is expected to sign a final agreement with Greek privatization fund TAIPED.

The Copelouzos Group is expected to acquire a stake of between 10 and 20 percent in DEPA Infrastructure through Faethon, a group company controlled by family member Elmina Copelouzou.

The Copelouzos Group and Italgas had reached an agreement on this partnership while the DEPA Infrastructure tender was still in progress.

The total value of the DEPA Infrastructure acquisition by Italgas is worth 940 million euros, making it one of the biggest deals reached in Greece in recent years.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

As its next step, Italgas will also buy the remaining 49 percent of EDA THESS following a decision by Eni Gas e Luce to sell this stake.

DEPA Infrastructure sale to Italgas nearing completion

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The sale procedure for DEPA Infrastructure, acquired by Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is now nearing completion, with its sales and purchase agreement expected to be signed within the next few days.

The agreement was forwarded to the inspection committee on October 26 and approved a fortnight later. Once the SPA is signed all financial aspects of the agreement are expected to be completed by early 2022 as Italgas will need to be certified by RAE, Greece’s Regulatory Authority for Energy, and receive necessary approvals from the competition committee.

Italgas emerged as the winning bidder in a tender offering 100 percent of DEPA Infrastructure with an offer that exceeded the most optimistic of expectations to reach 733 million euros.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

Italgas has announced, as part of its strategic plan for 2021 to 2027, an investment plan totaling 7.5 billion euros, the aim being to reinforce the natural gas distribution network’s strategic role in the decarbonization procedure.

Italgas, whose roots stretch back 180 years, operates 70,000 kilometers of distribution networks in Italy, servicing over 1,800 municipalities.

Regulatory framework, potential key to Italgas’ DEPA Infr. move

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The existing regulatory framework and country’s gas penetration prospects were key attractions in Italgas’ decision to develop an interest in DEPA Infrastructure, according to the Italian company, the preferred bidder in a privatization offering a 100 percent stake.

Given the Greek government’s approval, the agreement is expected to be completed by the end of the year, the Italian company’s administration has just informed. Bidding procedures were completed last week.

Italgas began considering its DEPA move back in the spring of 2018 and views its acquisition as a significant step signaling the company’s return to the Greek market following a presence some years ago through gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas, chief executive Paolo Gallo noted.

“Greece is similar to Sardinia. Investments are needed. We can also develop our knowhow here for new, fully digital networks that will lead Greece through the energy transition,” Gallo commented.

The DEPA Infrastructure deal perfectly matches Italgas’ long-term strategic vision, while the Italian company, through this investment, can maintain a strong presence in Greece for decades, possibly right up until 2043, Gallo projected.

Italgas plans to increase DEPA Infrastructure’s network supply points from 509 last year to 870 by 2026 and over 1,050 by 2030. It also aims to extend the network’s total length from 6,875 km to 10,800 km in 2026 and 11,500 km in 2030.

Italgas expects DEPA Infrastructure’s revenue to increase from 129 million euros last year to 210 million euros in 2026 and 240 million euros in 2030, while operating profit is expected to rise from 81 million euros to 160 million euros in 2026 and 185 million euros in 2030.

Energy privatizations exceed forecasts, raising nearly €3bn

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Two major energy-sector privatizations whose bidding procedures were completed last week, the 100 percent sale of gas company DEPA Infrastructure and 49 percent sale of electricity distribution network operator DEDDIE/HEDNO, exceeded even the most optimistic of expectations, resulting in total revenue, from both sales, of 2.849 billion euros, well over initial projections of 2.2 billion euros.

Australian fund Macquarie’s 2.116 billion-euro winning offer for 49 percent of DEDDIE/HEDNO, being offered without managerial control, stands as a record sum for Greek privatizations.

The DEDDIE/HEDNO sale’s amount will be used by power utility PPC, the parent company, for network modernization, RES growth, and improved customer services.

Italy’s Italgas secured 100 percent of DEPA Infrastructure with an improved follow-up offer of 733 million euros. Thus sum is expected to exceed 800 million euros once the buyer’s bid for a 49 percent stake in distributor EDA THESS, covering the Thessaloniki and Thessaly areas, is submitted and added to the tally.

According to the DEPA Infrastructure sale’s terms, the winning bidder must also purchase EDA THESS’s 49 percent stake, held by Italy’s Eni gas e Luce, wanting to sell.

The favorable outcomes of the two privatizations highlight the country’s improving investment climate as well as the confidence of foreign institutional and strategic investors in the prospects of the Greek economy, Prime Minister Kyriakos Mitsotakis noted. This improvement is also confirmed by yet another upgrade of the Greek economy, this time by Scope Rating, he added.

Besides signaling good news for the Greek economy, the DEDDIE/HEDNO and DEPA Infrastructure privatizations also send an upbeat message on the prospects of the domestic energy market.

 

Big week for energy privatizations, approaching finales

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It is a big week for the country’s energy privatizations with gas company DEPA Infrastructure’s tender set to reach a concluding stage tomorrow and that of distribution network operator DEDDIE/HEDNO also approaching its finale as its binding bids are scheduled to be opened on Friday.

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, has, according to sources, submitted the highest bid in the DEPA Infrastructure sale, offering an 100 percent stake, and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by tomorrow.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

As for the privatization of DEDDIE/HEDNO, a power utility PPC subsidiary, four binding offers, for a 49% stake, have been submitted by major international funds CVC Capital Partners Group, First Sentier Investors Group, KKR Group, and the Macquarie Group. This level of participation could boost bid levels. Offers of over 1.5 billion euros, or even 1.7 billion euros, could be unveiled, sources have anticipated.

The rebounding economy, potential of Greece’s energy market, as well as the statures of all five suitors involved in the two sales could result in two of the country’s most lucrative privatization agreements, in all sectors.

Italgas, DEPA Infrastructure’s top bidder, step from acquisition

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Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is now one step away from acquiring Greece’s DEPA Infrastructure as, according to energypresss sources, it has submitted the highest bid in the DEPA Infrastructure sale and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by September 8.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

The preferred bidder may be officially announced on September 9. The sale procedure is expected to be finalized by the end of the year as national and European authorities will need to re-certify DEPA Infrastructure as a natural gas network operator under its new ownership to emerge from the sale.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

The preferred bidder will also submit an offer for the remaining 49 percent stake in EDA THESS, based on an agreement reached between TAIPED, the privatization fund, with Italy’s Eni Gas e Luce, the current holder of this minority stake.

As a result, DEPA Infrastructure’s winning bidder stands to become the sole stakeholder in the three gas distribution companies.

DEPA Infrastructure bidder legal files opened ahead of offers

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Privatization fund TAIPED has opened first-stage files carrying legal documents submitted by two bidders, Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS, for the 100 percent sale of gas company DEPA Infrastructure.

This is the first step before the financial offers submitted by the two bidders are opened.

TAIPED officials are now examining the legal documents in case any clarification is needed before the sale’s procedure advances to the second and final stage, when the financial offers are opened, probably towards the end of August or early September.

The possibility of the bidders being asked to improve their offers has not been ruled out.

 

Italgas, Czech Republic’s EPH bid for DEPA Infrastructure

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Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH) met yesterday’s deadline to submit binding bids for the 100 percent sale of gas company DEPA Infrastructure, bringing this privatization to its final stretch.

TAIPED, Greece’s privatization fund, will now need to check if the files submitted by the suitors are complete before opening up their respective financial offers.

The privatization fund’s board will inspect the first-stage files, carrying legal documents, at its next meeting, sources informed. If the files are complete, TAIPED will proceed to the next step of opening up the financial offers, but not before some time has elapsed to allow for possible objections.

If the price difference in the financial offers is no more than 15 percent, TAIPED will request improved follow-up bids from both bidders.

The preferred bidder is expected to be announced by the end of August or early September. DG Comp and DG Energy approval will then be required before an agreement can be signed for the transfer, to the winning bidder, of TAIPED’s 65 percent stake control of DEPA Infrastructure and the 35 percent stake held by Hellenic Petroleum (ELPE).

The sale of DEPA Infrastructure, controlling the distribution networks of EDA Attiki, covering the wider Athens area, EDA Thess, covering Thessaloniki and Thessaly, as well as DEDA, covering the rest of Greece, will spell the end of the Greek State’s control of the country’s low and medium-pressure natural gas pipelines.

DEPA Infrastructure sale now a showdown for two, Italgas, EPH

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With the deadline for binding bids in the 100 percent sale of gas company DEPA Infrastructure expiring tomorrow, a latest update from sources indicates that two suitors will submit offers, Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH). An additional bid by a third participant has not been ruled out.

Besides Italgas and EPH, four other bidders have qualified for the privatization’s final round, these being two Australian funds, FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II) and MACQUARIE (MEIF 6 DI HOLDINGS), international fund KKR and Chinese consortium SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

The Greek State is selling its 65 percent stake in DEPA Infrastructure, through the privatization fund TAIPED, and Hellenic Petroleum (ELPE) the other 35 percent.

Italgas’ chief executive Paolo Gallo, in an interview with Greek daily Ta Nea, has stated the company will be submitting a binding offer for the DEPA Infrastructure sale.

Italgas is Italy’s biggest natural gas distributor, holding a 34 percent market share, and also ranks as Europe’s third biggest network operator. Italgas operates 70,000 kilometers of networks serving over 1,800 municipalities.

Rival bidder EPH is a formidable energy group with vertically integrated investments in central Europe. It owns and utilizes assets in the Czech Republic, Slovakia, Germany, Italy, the UK, France, Hungary and Poland, covering a range of domains such as energy and heat production, natural gas transmission and storage, as well as distribution and supply of natural gas, heating and electricity.

DEPA Infrastructure controls gas distributors EDA Attiki and EDA THESS, both with 51 percent stakes, as well as DEDA.

DEPA Infrastructure sale’s July 15 deadline confirmed, 2-3 bids expected

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Privatization fund TAIPED has decided to keep unchanged a July 15 deadline for binding bids concerning the 100 percent sale of gas company DEPA Infrastructure, meaning this privatization procedure, now 17 months long, has hit the final stretch.

The Greek State is selling its 65 percent stake in DEPA Infrastructure and Hellenic Petroleum (ELPE) the other 35 percent.

The deadline date was reconfirmed following the energy ministry’s settlement of pending issues.

Just days ago, a legislative revision was ratified to grant 30-year license extensions to the EDA distribution companies, DEPA subsidiaries.

Also, a rule enabling the removal of geographical areas from the control of EDA companies if delays in their development of distribution networks in these areas have reached 18 months will not be applied if the EDA companies are found to not be responsible for these delays.

Moreover, the legislative revision has introduced a new mechanism enabling required revenue recovery underperformance by one of the country’s three EDA distribution company to be covered by the other EDA companies, through revenue offsetting procedures concerning equivalent periods.

If this procedure fails to resolve required revenue recovery underperformances, then any discrepancy will be covered through price adjustments at all three EDA companies.

A total of six participants have qualified for the final round of the DEPA Infrastructure sale. According to sources, two or three suitors are seen submitting binding bids in just over a week, but this remains to be confirmed.

The six qualifiers are:

  • EP INVESTMENT ADVISORS
  • FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II)
  • ITALGAS SpA
  • KKR (KKR Global Infrastructure Investors III L.P.)
  • MACQUARIE (MEIF 6 DI HOLDINGS)
  • SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd consortium.

 

Legislative revisions to unblock DEPA Infrastructure sale

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The energy ministry is planning to soon submit to Parliament legislative revisions designed to resolve pending issues that have held back the final stage of a privatization concerning gas company DEPA Infrastructure, sources have informed. The ministry will aim for the submission of binding offers by July.

Issues that have held back the sale, offering suitors 100 percent of DEPA Infrastructure, include a pending unification of the asset base of DEPA Infrastructure’s trio of EDA gas distribution subsidiaries and the establishment of a sale procedure for Eni Gas e Luce’s 49 percent stake in EDA THESS.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Italy’s Eni gas e Luce, maintaining the management rights with its 49 percent share in the gas distributor, wants to sell its stake.

Eni gas e Luce’s involvement in distribution has remained secondary to retail energy, the company’s primary focus, on an international scale.

The ministry’s anticipated legislative revisions promise to unify the asset bases of EDA Attiki, distributing to the wider Athens area, EDA THESS (Thessaly and Thessaloniki), as well as DEDA, covering the rest of Greece.

This asset base unification concerning the three distributors will lessen DEDA’s cost burden resulting from its network expansion projects as small distribution surcharge hikes by the two other EDA companies will hasten DEDA’s recovery of investment costs.

EP INVESTMENT ADVISORS; FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II); ITALGAS SpA; KKR (KKR Global Infrastructure Investors III L.P.); MACQUARIE (MEIF 6 DI HOLDINGS); and a consortium comprising SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd are the qualifiers through to the final round of the DEPA Infrastructure privatization.

DEPA Infrastructure sale could include Eni’s 49% in EDA Thess

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The likelihood of revisions to Greek privatization fund TAIPED’s ongoing sale of DEPA Infrastructure that would incorporate the sale of a 49 percent stake in gas distributor EDA THESS, held by Italy’s Eni gas e Luce, into the procedure is now seen as probable as talks on the prospect have advanced.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Eni gas e Luce maintains the management rights with its 49 percent stake in the gas distributor.

Though Eni gas e Luce has been particularly upbeat in its judgement of EDA THESS’s performance until now, its involvement in distribution has remained secondary to retail energy, the company’s primary focus, on an international scale.

Eni gas e Luce’s 49 percent stake in EDA THESS is the Italian company’s sole distribution investment.

Prior to TAIPED’s launch of the DEPA Infrastructure sale, Eni gas e Luce had made clear its intentions to withdraw from its Greek investment in gas distribution.

DEPA has decided not to exercise priority rights it holds for EDA THESS’s 49 percent stake.

Eni gas e Luce initially seemed to reach an agreement to transfer its EDA THESS stake to Italgas, Italy’s biggest gas distributor and Europe’s third largest. However, Greek officials objected, deeming such a move would have given Italgas an advantage over rivals in the sale of DEPA Infrastructure. Italgas is one of six bidding teams through to this privatization’s second round.

Following a period of stagnancy, Eni gas e Luce returned, late in 2020, with a fresh proposal to TAIPED, calling for the attachment of its 49 percent stake in EDA THESS to the DEPA Infrastructure sale.

Besides Italgas, the other five bidding formations that have qualified for 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); SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

 

DEPA Comm VDR open; 5-year stay for Infrastructure buyer

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The video data room for the privatization procedure of DEPA Commercial, one of two new gas utility DEPA entities placed for sale, is now open to prospective bidders, but initial information made available is limited to non-financial details.

Financial details on DEPA Commercial will be made available as a second step to all consultants representing the potential buyers, while a third and final stage will follow to conditionally offer bidders confidential information in person at the DEPA headquarters.

As previously reported, the second-round, binding-bids deadline for the DEPA Commercial sale, offering investors a 65 percent stake, has been extended to March, 2021.

The field of second-round qualifiers is comprised of two partnerships, Hellenic Petroleum (ELPE) with Edison and power utility PPC with Motor Oil Hellas, plus Mytilineos, TERNA, the Copelouzos group, Shell, and the Swiss-based MET Group.

As for DEPA Infrastructure, the other new DEPA entity up for sale, energy minister Costis Hatzidakis is preparing a legislative revision that will require the winning bidder to retain its company shares for a period of at least five years.

This condition will also apply for the DEPA Infrastructure subsidiaries EDA Attiki, EDA Thess and DEDA, the gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively. DEPA fully owns DEDA and EDA Attiki and holds a 51 percent stake in EDA Thess.

The DEPA Infrastructure binding-bids deadline has also been extended to the end of February, 2021. Italgas, EPH, First State Investments, KKR, Macquarie and Sino-CEEF have qualified for the final round.

 

DEPA Infrastructure VDR open, DEPA Commercial data soon

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A virtual data room has just been opened for the six bidding teams preparing to make second-round offers in the privatization of gas company DEPA Infrastracture, an offshoot of gas utility DEPA.

Czech company EPH, Italy’s Italgas, the Australian investment funds First State Investments and Macquarie, US firm KKR and China’s Sino-CEEF & Shanghai Dazhong Public Utilities now have access to all relevant data concerning the DEPA Infrastructure sale.

Another VDR is expected to be opened within the next few days for bidders participating in the privatization of DEPA Commercial, DEPA’s other entity up for sale.

The participants in this sale, seven entries in total, are: Motor Oil Hellas-PPC, ELPE-Edison, Mytilineos, GEK-TERNA, the Copelouzos group, Dutch company Shell and the Swiss-based MET Group.

VDR information for the DEPA Commercial sale will be made available over three phases as a protective measure intended to ensure competition. The first phase, offering non-sensitive data, will be open for all. Access to VDR information during the second stage, offering sensitive data, will be restricted to consultants. Bidders will be offered conditional access to confidential information in the third phase.

Greece’s privatization fund TAIPED is aiming to declare preferred bidders for both sales in the final quarter of this year. Market officials, however, believe this is more likely to occur in the first quarter of 2021.

DEPA Commercial bidders are allowed to team up and establish consortiums but partnerships for the DEPA Infrastructure sale are not permitted.

Bidders participating in the DEPA Commercial sale are mainly eyeing the company’s prized asset, retail gas supplier and subsidiary Fysiko Aerio Attikis, covering the wider Athens area. This company already serves close to 400,000 households and 10,000 businesses.

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

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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

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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

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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.