Jetoil placed on the comeback trail by new owner Centracore

Bankruptcy-struck oil trading company Jetoil, now controlled by Austria’s Centracore and on the rebound, has reclaimed approximately 15 percent of the fuel-station network it controlled prior to the rescue plan.

Jetoil now operates 83 fuel stations (DODO, dealer-owned, dealer-operated), primarily in northern Greece, as well as the Thessaly, Epirus and other mainland regions.

At the peak of Jetoil’s crisis in the summer of 2016 – when founder Kyriakos Mamidakis committed suicide, aged 84, not long after the company had filed for bankruptcy – the company’s retail network had shrunk to just 34 outlets.

A Jetoil rescue plan was approved Iast year. Strategic investor Centracore agreed to take on the company’s liabilities following a partial haircut.

Besides a purchase price of 107 million euros, the new Jetoil shareholder has invested 10 million euros to upgrade the company’s storage facility in Kalohori, on the outskirts of Thessaloniki.

Jetoil has increased its sales in Greece and achieved significantly higher exports since its takeover. Total sales for the first financial year since Centracore’s entry reached 420 million euros generated by a trading volume of 350,000 metric tons.

In a year, the company has achieved 35 percent of its business plan’s target, set at one million metric tons of trading volume, or a 10 percent Greek market share, including exports.

The strategic investor, maintaining access to Russian refineries, has admitted the decision to invest in Greece was based on export potential to Balkan markets. Centracore obtained a Greek trading license in July, 2018.

Centracore is a Vienna-based trading company headed by Luxembourg’s UFG Europe Holding, holding an 80.1 percent share and comprised of private equity funds. Russian Petroleum company Rosneft holds the other 19.9 percent.

Unclear path for bankrupt Jetoil’s rescue procedure

The prospects of a rescue bid for bankrupt oil trading company Jetoil made by Centracore, a Vienna-based company in which Russia’s Rosneft holds a stake, appear indefinite.

Market officials believe that guarantees provided by Centracore as part of its proposal to rescue Jetoil from bankruptcy will most likely not be accepted by the creditor banks, especially two of Jetoil’s key creditors.

Should this hold true, the rescue model plan associated with Centracore, which entails the entry of a strategic investor, partial deletion of debt and settlement of the remaining debt amount through the purchase price, is bound to fail.

However, not all pundits agree that this will be the case and see no real reason why this rescue effort plan could be stopped.

The wider investor interest being expressed for Jetoil’s storage facilities in Kalohori, Thessaloniki, the bankrupt firm’s main asset, could prove pivotal in the rescue procedure. Investors are showing far less interest in the company’s other assets.

This factor, alone, could end up redirecting the entire rescue effort and prompt a competive procedure or separate sales of fixed assets such as the fuel storage facilties.

Such a development could spark an even wider investor interest in Jetoil’s storage facilities, seen as a springboard for fuel trading activities in northern Greece as well as the wider Balkan region.


Major fuel players growing amid intensifying competition

Despite showing signs of a rebound in the first two months of the year, the gasoline market has struck negative territory, a development that is intensifying competition and prompting traders to revise their strategies.

Approximately 23.5 percent of the Greek market’s petrol stations have gone out of business during the country’s prolonged recession, now into its seventh year. In this time, the number of outlets has been reduced to less than 6,500, from roughly 8,500.

Amid this cut-throat environment, bigger players, especially those directly controlled by the ELPE and Motor Oil Hellas refineries, are increasing their market shares and adding new outlets to their chains in an effort to maintain sales at high levels.

Enterprises that control approximately 50 percent of the retail fuel market have managed to make further gains.

Following up on its takeover of Cyclon, a move that boosted its retail network by roughly 200 petrol stations, the Motor Oil Hellas group recently also acquired the Revoil storage facilities in Kavala to acquire an additional base in northern Greece. Over the past few years, Motor Oil Hellas has moved to increase its retail network, especially those operated by Coral and Avin, the refinery’s two main retail subsidiaries.

ELPE (Hellenic Petroleum), which controls Greece’s EKO and BP retail networks, the market leader and follower, respectively, is taking similar action. The leadership at the refinery’s sales division recently noted the group plans to bolster its presence in areas of high tourism growth.

Besides increasing their retail networks, the two refineries are also employing other means to increase fuel sales. As part of its partnership with the supermarket chain Alfa-Vita Vassilopoulos (AB), Coral, another retail arm controlled by Motor Oil, has increased its number of petrol stations combining mini markets.

Further market changes are expected following Jetoil’s bankruptcy last year. Russia’s Centracore has expressed an interest to acquire the company’s storage facilities in Thessaloniki. Motor Oil Hellas and ELPE are also eyeing these facilities as a springboard for further growth in northern Greece and neighboring Balkan countries.

EKO is the retail fuel market leader with a 14.50 percent share. It is followed by BP (12.7%), Shell (11.7%), Elinoil (9%), Revoil (8.6%), Aegean (8.1%). Avin (7.5%), Eteka (3.9%), Silk Oil (3.7%) and Cyclon (3.2%).

ELPE interested in Jetoil’s Thessaloniki storage facilities

ELPE (Hellenic Petroleum) is believed to be preparing to express an interest in bankrupt oil trading company Jetoil, or a part of its assets, either independently or with an investment partner.

This prospect follows the interest already expressed in Jetoil, once a formidable market player, by Cetracore Energy, a Vienna-based company in which Russia’s Rosneft holds a stake.

ELPE will need to wait for the outcome of ongoing negotiations between Cetracore Energy, banks, creditors and Jetoil shareholders.

It remains unclear whether Cetracore Energy’s quest to take over Jetoil will prove successful. Though no objections had become apparent until now, rumors have emerged over the past few days claiming that the creditor banks deem the guarantees offered by Cetracore Energy as insufficient.

If these rumors are confirmed and the Jetoil rescue procedure currently reserved for Cetracore Energy runs out of time, then other interested parties will be invited to submit offers.

This is where ELPE, one of Jetoil’s creditors, could move in. The Greek refinery appears to be focusing its interest on Jetoil’s storage facilities in Thessaloniki, not the company as a whole.

At its peak, Jetoil held a 10 percent market share following the addition of the Dracoil and El Petrol retail networks to its ranks.

Jetoil’s founder and president Kyriakos Mamidakis committed suicide last summer, at the age of 84, not long after the company had filed for bankruptcy.


Cetracore, whose make-up includes Rosneft, prepares for Jetoil takeover

A request submitted today by Jetoil to have its bankruptcy protection case postponed for a latter date has been accepted by a Greek court, which reset the session for February 14.

The oil trading company, whose network of petrol stations in Greece shrunk from roughly 8,500 to 6,000 over the past few years, sought the court postponement to prepare and apply for a revised bankruptcy procedure, based on article 106B, the same legal provision resorted to by the fallen Marinopoulos supermarket chain.

This revised bankruptcy approach is linked to takeover interest expressed in Jetoil by Cetracore Energy, a Vienna-based oil trading company. Russia’s Rosneft holds a stake in the Austrian company.

According to sources, a company official made a court appearance today to confirm this interest. An agreement, including confidentiality terms, has been signed by the two sides.

Jetoil’s founder and president Kyriakos Mamidakis recently committed suicide at the age of 84, not long after the company filed for bankruptcy last June, a coroner’s report confirmed.

At its peak, Jetoil held a 10 percent market share following the addition of the Dracoil and El Petrol retail networks to its ranks.


Alpha Bank eyeing Jetoil’s Thessaloniki storage facility

Alpha Bank, which is seeking to prevent troubled Jetoil from being granted bankruptcy protection, has set its sights on the company’s substantial petroleum product storage facilities in Thessaloniki’s Kalohori region.

Just over a week ago, Mamidoil Jetoil’s 84-year-old founder and president Kyriakos Mamidakis stunned the entrepreneurial world by committing suicide. Mamidoil Jetoil had filed for bankruptcy on June 9.

Alpha Bank has expressed doubts about the sustainability of Jetoil’s restructuring plan ahead of this Wednesday’s hearing of the case at a Piraeus court.

Alpha Bank has extended loans worth 62 million euros to Jetoil, a company whose bank loans, owed to various banks, totals approximately 190 million euros.

If Alpha Bank, along with other creditors, continues to oppose Jetoil’s request for bankruptcy protection at Wednesday’s court session, then the troubled petroleum company is expected to contend that a US fund, undisclosed, is prepared to provide 120 million euros to support Jetoil’s restructuring plan.

At the hearing, Mamidoil Jetoil SA’s administration will claim that the company’s induction into a restructuring program will enable it to negotiate with creditors for loan revisions that will lead to a path of sustainability.

Jetoil’s petroleum storage facilities in Thessaloniki’s Kalohori region represent 14 percent of the country’s total fuel storage capacity. Prior to the Greek crisis, now well into its sixth year, the facility handled two million cubic meters of fuel annually. A large amount of this concerned exports to the Balkans.

Through its venture Mamidoil – Albanian SA, the company also owns storage facilities with a 12,000 cubic-meter capacity in Durres, Albania’s biggest port, an 18,000 cubic meter capacity facility in Kosovo (Standardplin Sh.p.k.),and is also active in the Serbian and Bulgarian markets.

Tragic dimension added to fuel sector’s tax-burden problems

Since the outbreak of the Greek economic crisis, a prolonged and deep recession now over six years long, fuel-sector companies have been treated as cash cows by the succession of governments for tax revenues used to fill various holes in the national budget. However, from a certain point onwards, the approach began to backfire as the heavy load of taxes imposed on fuel elevated Greek fuel prices to an extent that made them Europe’s highest, a development that has severely subdued demand and, ultimately, reduced the government’s fuel-linked tax revenues. The various taxes imposed on fuel in Greece now constitute 70 percent of retail prices. Fuel trading firms have generally performed woefully, incurring losses for some years now.

The local fuel sector’s financial troubles made tragic headlines over the weekend with the suicide, according to a coroner’s findings, of 84-year-old entrepreneur Kyriakos Mamidakis, founder and president of Mamidoil Jetoil, an enterprise that had filed for bankruptcy on June 9.

At its peak, Jetoil held a 10 percent market share following the addition of the Dracoil and El Petrol retail networks to its ranks.

The country’s network of petrol stations has shrunk from roughly 8,500 stations to 6,000 stations over the past few years.

According to certain sources, another petrol trading firm, one of the market’s smaller players, is headed for bankruptcy, while more victims, both in wholesale and retail, could emerge.

The latest taxes imposed on fuel have further increased the pressure felt in the sector. According to latest fuel market data, fuel demand in June plummeted 14 percent, an unprecedented drop in a month. Auto fuel demand fell seven percent in June.

Some market officials contend the government’s latest tax and social security revisions have yet to impact the fuel sector. These sources forecast that between 200 to 300 more petrol stations will soon go out of business as a result of the measures.