Rumors rife about board line-up changes at ELPE

Rumors of board line-up changes at ELPE (Hellenic Petroleum) have been rife over the past few weeks, ahead of a company shareholders’ meeting this Friday, but the prospect of a move by the refinery’s chairman Stathis Tsotsoros to the main power utility PPC, in place of its chief executive Manolis Panagiotakis, as was reported by local media on Sunday, has been ruled out by a government source.

Paneuropean Oil, a member of the Latsis corporate group, is the main shareholder of ELPE with a 45.47 percent stake, while the Greek State holds a 35 percent share.

The possibility of board changes at ELPE emerged slightly less than a month ago when disagreements between the two main shareholders led to the postponement of the refinery’s annual shareholders’ meeting by a month.

At the time, Paneuropean issued a statement noting that talks between the two main shareholders had yet to be completed, without providing further details.

It has been reported that Paneuropean is seeking stronger representation on the ELPE board. Other sources have attributed the disagreement to issues concerning the development of Hellenikon, the former Athens International Airport, a prime seaside expanse in southern Athens in which the Latsis group holds an interest.

Other reports contend that the Greek State and Paneuropean have reached an agreement for the ELPE board and can be expected to deliver a common proposal at Friday’s meeting.

At present, the Latsis group is represented by just two officials on ELPE’s 13-member board, despite being the refinery’s main shareholder.

Prime Minister Alexis Tsipras, commenting a month ago on ELPE’s recent record profit figures, noted that the company’s results were impressive, while adding: “winning teams don’t change their line ups.”

Paneuropean motives behind ELPE meeting delay unknown

A request made by Paneuropean Oil – a member of the Latsis corporate group holding a 45.47 percent stake in ELPE (Hellenic Petroleum) – for a latter date concerning the oil refinery’s next shareholders’ meeting, has been accepted but the motive behind the move remains unknown.

Prior to this request for the meeting’s delay, the Latsis group had remained discreet with regard to its ELPE stake in years. However, last July, Paneuropean did increase its stake in ELPE from 42 percent to the current level.

Reports claiming to know the reason, or reasons, behind the Latsis group’s move to delay the next ELPE shareholders’ meeting are merely speculative.

ELPE’s future as a shareholder in DEPA, the public gas corporation, and DESFA, the natural gas grid operator, is one issue that needs to be cleared up.

The utilization of the Greek State’s 35 percent share in ELPE also needs to be addressed. TAIPED, the State Privatization Fund, has already announced a tender seeking a consultant for this stake’s prospective sale.

The administrative rights of ELPE’s two main shareholders, Paneuropean Oil and the Greek State, also need to be clarified.

At present, Paneuropean holds two seats on the ELPE board, while officials stemming from the Latsis group hold key executive posts at the refinery, especially in financial management and planning.

Certain reports have claimed the Greek government has accepted a request by the Latsis group for the appointment of a Paneuropean official on the ELPE board. Prime Minister Alexis Tsipras responded to these reports by declaring that “winning teams do not change their line-ups,” a reference to ELPE’s recent company record profit figures. Even so, an increased Paneuropean representation at ELPE has not been ruled out.

Other reports have linked the Latsis group’s request for a delay of the next ELPE shareholders’ meeting to discontent felt by the group in its relations with the government for its wider corporate interests, beyond ELPE.

 

Latsis corporate group pivotal to govt’s DESFA sale plans

The Latsis corporate group, the main shareholder of ELPE (Hellenic Petroleum), is expected to play a pivotal role in the Greek government’s quest to retain as big a share as possible of DESFA, the natural gas grid operator, for the Greek State – perhaps even 51 percent.

ELPE holds a 35 percent stake of DESFA, part of which will be needed if the Greek State is to maintain a considerable share of the operator. A new international tender is being planned following the recent collapse of the long-lasting initial sale effort.

The Greek State currently holds 66 percent of DESFA, of which 31 percent, however, has been transferred to TAIPED, the state privatization fund, which essentially leaves the state with 35 percent, unless a percentage is acquired from ELPE’s percent stake.

According to energypress, ELPE has not yet been approached by the Greek government. In the event that an offer is made, a positive response from ELPE is anything but certain. The Latsis group sees strong potential in southeast Europe’s natural gas market.

The DESFA sale process is moving slowly despite the fact that the government needs to fill a 188 million-euro gap in privatization revenues for 2017.

The government can be expected to continue dragging its feet on the DESFA sale if its objective of establishing a plan that may ensure considerable control of the operator for the Greek State is not achieved. The energy ministry has not denied its interest in the prospect of a 51 percent DESFA stake for the Greek State.

New rumors arise for Latsis partial sale of ELPE stake

The recent equity share increase by Paneuropean Oil, a member of the Latsis corporate group, in ELPE (Hellenic Petroleum) from 42 percent to 45.5 percent has been interpreted by market officials as an attempt, by the Latsis group, to increase the market value of its share in the venture in preparation for a partial or full sale of its ELPE stake at a higher equity price when TAIPED, the State Privatization Fund, announces the sale of the Greek State’s 35 percent share of ELPE within 2017.

The Latsis group has not offered any comments on its increased ELPE stake.

Earlier this week, when it was announced that Paneuropean had increased its stake in ELPE from 42 percent to 45.5 percent, ELPE’s share rose by 4.42 percent to 3.78 euros. Yesterday, it increased by 1.59 percent to 3.84 euros.

Although officially denied by the Latsis group, its disengagement from ELPE has been contemplated since at least 2012, when a previous attempt was made to privatize the Greek State’s share in the oil refinery.

If the Latsis group is to abandon ELPE, it will need to sell along with the Greek State as the respective stakes of the two, if offered to an investor separately, are not commercially appealing. Any potential investor, whether from Russia, Iran, or anywhere else for that matter, would want control of a majority stake in ELPE. Acquiring the ELPE stake held by either Paneuropean or the Greek State, both under 51 percent, will not do.

In 2012, TAIPED’s then-administration had worked on a formula that would have offered the Greek State’s share of ELPE along with a portion of Paneuropean’s share to facilitate a privatization deal.

At the time, it had been reported that the Latsis group wanted to maintain a considerable share in ELPE but was willing to sell a portion and lower its 42 percent stake to a level of about 30 percent.

This partial surrender by the Latsis group would have stood as an attractive prospect for any strategic investor as it would have offered majority control of ELPE. This prospect, alone, increased the market value of the Latsis share that would have been sold.