Major investment interest in PPC equity capital increase

Power utility PPC’s equity capital increase, planned for late October, is expected to attract over one billion euros, in excess of the 750 million-euro amount initially announced, strong interest by foreign institutional investors, including major US interest, as well as dozens of meetings lined up for the coming weeks with potential participants, has indicated.

The next fortnight or so is expected to be filled with non-business news concerning PPC’s equity capital increase, the related topics to include discussion on possible participants, as well as political debate over the equity capital increase, effectively a partial privatization that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

The development promises to free the utility from restrictions imposed on state-controlled companies, boost its finances and enable the company to further consolidate its position as the dominant market player. Small and big energy players are expected to be impacted by the PPC move. Talk of takeovers is already brewing.

The equity capital increase, along with PPC’s not-yet-finalized sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a subsidiary, to Australian fund Macquarie for 2.116 billion euros, will offer crucial financial support for PPC’s 8.5 billion-euro investment plan covering the next five years. Green energy production and ventures abroad are the plan’s key objectives.

PPC net debt drops below €3bn, Macquarie deal may push figure lower

Power utility PPC, expected to post first-half results today, will reportedly announce a net debt figure (total debt minus cash reserves) of less than three billion euros, following an extended period above this level, brought down by the company’s two securitization agreements with JP Morgan and Pimco for unpaid receivables.

The two securitization deals, worth a total of approximately 370 million euros, have helped reduce PPC’s net debt to less than three billion euros for the first half. PPC’s net debt for the first quarter was worth 3.27 billion euros.

The power utility’s net debt could drop even further once a recent 2.116 billion-euro agreement with Australian fund Macquarie, for its acquisition of a 49 percent stake in distribution network operator DEDDIE/HEDNO, a PPC subsidiary, is finalized.

PPC’s net debt was at 5 billion euros in 2014 and could plunge well below the three billion-euro mark as a result of the recent deal with Macquarie, the winning bidder in a DEDDIE/HEDNO tender.

Overall, PPC is expected to post weaker financial results, compared to previous quarters, as a result of escalated prices for CO2 emission rights, fuel and gas, and the company’s market-share contraction. However, these unfavorable factors are believed to have been partially offset by an increase in demand for electricity over recent months.

 

Energy privatizations exceed forecasts, raising nearly €3bn

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

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.

Binding bids for HEDNO today, PPC sets ambitious target price

The sale of a 49 percent stake in power utility PPC’s subsidiary DEDDIE/HEDNO, the distribution network operator, has reached the final stretch with at least three bidders in contention as the binding-bids deadline expires today.

US fund CVC Capital, as well as Australia’s Macquarie and First Sentier, are believed to be in the running, while the participation of KKR (Kohlberg Kravis Roberts & Co. L.P.) remains probable.

PPC’s administration is not expected to accept anything less than 1.5 billion euros for the subsidiary’s 49 percent, a price expectation based on DEDDIE/HEDNO’s book value, estimated at 3 billion euros.

The operator’s regulated earnings for 2021 to 2024 begin at 771 million euros and reach 798 million euros in 2024.

The financial offers by bidders are not expected to be opened today but will remain under wraps until all other details (legal, technical) of the offers have been fully examined.

Once the binding bids have been submitted, PPC will call an extraordinary general shareholders’ meeting for the sale’s approval. PPC’s objective is to have completed this partial privatization by the end of the year.

 

HEDNO bids confirmed Friday, sale price of over €1.7bn seen

Just three days remain before claims, for some time now, concerning binding bids from three major funds in the 49 percent sale of distribution network operator DEDDIE/HEDNO can be confirmed.

US fund CVC Capital, as well as Australia’s Macquarie and First Sentier, are all believed to have submitted binding bids, while the participation of KKR (Kohlberg Kravis Roberts & Co. L.P.) remains uncertain. All will be confirmed this Friday.

More crucially, the bids will reveal whether the sale of DEDDIE/HEDNO’s 49 percent stake can exceed a price of 1.7 billion euros, as contended by bank and financing sources.

If these market projections are confirmed, the sale will be considered a resounding success as the DEDDIE/HEDNO stake will be sold at 1.18 times its Regulatory Asset Base (RAB).

According to a latest DEDDIE/HEDNO evaluation, assisted by professional services provider Grant Thornton, the operator’s total value is worth 2.95 billion euros.

 

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

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

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.

 

At least four binding bids seen in HEDNO 49% privatization

Four consortiums have been established involving most, if not all, of the nine participants through to the second round of a sale offering a 49 percent stake in distribution network operator DEDDIE/HEDNO, a subsidiary of power utility PPC, indicating that at least four binding offers can be expected, when these are submitted within August, sources monitoring the procedure have informed.

All nine qualifiers have been assessing DEDDIE/HEDNO’s technical and financial data, the sources said.

At its most recent session, PPC’s board approved a plan for the transfer of the group’s electricity distribution assets to DEDDIE/HEDNO.

Also, PPC has commissioned professional services company Grant Thorton for the asset evaluation process, expected in August.

The privatization’s nine second-round qualifiers are:

ARDIAN Infrastructure Funds

BCI – British Columbia Investment Management Corporation

BLACKROCK – BlackRock Alternatives Management, L.L.C

CVC Capital Partners – Advisers Company, S.a.r.l

F2i – Fondi Italiani per le Infrastructure SGR S.p.A

First Sentier Investors EDIF III GP S.a.r.l

KKR – Kohlberg Kravis Roberts & Co. L.P.

MACQUARIE Group Limited

OHA – Oak Hill Advisors LLP

HEDNO sale VDR now open to nine suitors, talks set to commence

Potential buyers of a 49 percent stake in power utility PPC subsidiary DEDDIE/HEDNO, the distribution network operator, have been given access to the operator’s video data room after signing confidentiality agreements.

PPC is now set to stage separate meetings with the suitors, nine in total, over the next 30 to 40 days, for talks, observations and negotiations leading to the establishment of a sale and purchase agreement as well as a shareholders’ agreement.

The shareholders’ agreement will stipulate the role of HEDNO’s minority partner, which, as has already been revealed, will offer the eventual buyer reinforced managerial rights, including proposal rights for the operator’s chief financial officer and chief operating officer posts on the board.

Given the pace of preceding privatizations in Greece, talks with the suitors are expected to last until the end of June, while officials are aiming for binding bids to be submitted within September.

The privatization’s nine second-round qualifiers have already begun talks for possible partnerships, between themselves and beyond.

US fund CVC Capital Partners, whose Greek portfolio has continuously grown, investments including three hospitals, Metropolitan, Iaso General and Ygeia, as well as anticipated deals for food production conglomerate Vivartia, dairy company Dodoni and insurance company Ethniki Asfalistiki, is engaged in talks with fellow US fund KKR and Australia’s Macquarie for the establishment of a consortium, it has been reported for some time now.

Legislative revisions to unblock DEPA Infrastructure sale

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.

HEDNO VDR opening Tuesday, bidders in partnership talks

Power utility PPC plans to open a virtual data room concerning the sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator, on Tuesday, once confidentiality agreements with nine second-round qualifiers, and other documents, have been approved by the utility’s board, expected a day earlier.

All documents necessary for the sale procedure will be forwarded to the nine bidders for observations.

The VDR will offer bidders access to technical and financial data concerning DEDDIE/HEDNO.

As of next week, PPC and each of the nine second-round qualifiers, preparing to make binding bids, will begin separate talks, correspondence and negotiations that are expected to run for months, for the finalization of a shareholders agreement.

Given the width of second-round qualifiers, this privatization’s completion is anticipated towards the end of autumn.

The buyer’s board representation will reflect the minority 49 percent stake to be acquired, with 5 members on an eleven-member board, or 4 members if a nine-member board is chosen.

Some board members will be given reinforced managerial roles for the PPC subsidiary. Proposals for the chief financial officer and chief operating officer posts will be made by the buyer, according to sources.

Though the road ahead towards the DEDDIE/HEDNO sale’s completion is long, the nine second-round qualifiers have already begun talks for possible partnerships, between themselves and beyond.

One of the nine qualifiers, the US fund CVC Capital Partners – whose Greek portfolio is continuously growing, investments including three hospitals, Metropolitan, Iaso General and Ygeia, as well as imminent deal completions for food production conglomerate Vivartia, dairy company Dodoni, and insurance company Ethniki Asfalistiki – is engaged in talks with fellow US fund KKR and Australia’s Macquarie for the establishment of a consortium that would bid as one for a 49 percent stake in DEDDIE/HEDNO. KKR and Macquarie are among the nine second-round qualifiers in the DEDDIE/HEDNO sale.

HEDNO suitors all real-money investors with long-term views

All nine qualifiers through to the second round of a tender offering a 49 percent stake of distribution network operator DEDDIE/HEDNO possess extensive experience in infrastructure management around the world and are long-term, real-money investors.

The tender’s shortlist, announced yesterday, includes Blackrock, the world’s biggest investment fund, back in the Greek picture after subscribing to a bond issue staged last month by the operator’s parent company PPC, the power grid operator.

Blackrock has based these investment decisions on Greece’s economic prospects beyond the pandemic as well as common business principles shared with PPC.

The capital managed by the nine qualifiers is worth 10.2 trillion euros. More importantly, the qualifiers are backed by formidable profiles, their portfolios carrying investments in utilities, infrastructure and energy companies.

France’s Ardian, managing assets worth over 100 billion euros, Canadian investment corporation British Columbia Investments (BCI), handling a 100 billion-euro portfolio, the American funds Blackrock, managing assets worth 9 trillion dollars, CVC Capital Partners (120 bn), KKR (250 bn) and Oak Hill (50 bn), Italy’s infrastructure fund F21, as well as Australia’s Macquarie (420 bn) and First Sentier (180 bn) are all long-term investors.

BCI and Macquarie have jointly engaged in a series of takeovers, beginning in 2012 with German networks company Open Grids Europe, and following up, in 2014, with US electricity firm Cleco, and networks company Endeavour Energy in 2017. BCI also controls Chilean power distributor Transelec as well as Canada’s Corix.

Blackrock controls US corporation Hearthstone Utilities and the UK’s Kelas Midtream and Calisen PLC, active in smart meters.

America’s KKR acquired New Jersey water management company Bayonne Water and Wastewater Concession in 2012 and Middletown Water in 2014.

Macquarie’s portfolio includes Spain’s Viesgo, Germany’s Open Grid Europe, and the portfolio of First Sentier (previously First State) includes the UK’s Electricity North West and Anglian Water.

HEDNO 49% privatization shortlist set to be announced tomorrow

A short list of qualifiers through to the second and final round of a privatization offering a 49 percent stake of distribution network operator DEDDIE/HEDNO is expected to be announced tomorrow, when endorsed by the board of the operator’s parent company PPC, the power utility.

The qualifiers will be given access to confidential data stored in the tender’s video data room.

Though PPC has not offered details on the first-round participants, informing only that the bidders, eleven in total, are strategic investors, network infrastructure operators and funds, banking officials have leaked their identities, revealing the turnout of leading international investors.

They include US fund Blackrock, the world’s biggest investment fund, as well as fellow American funds KKR, Oak Hill Advisors and CVC Capital Partners, the recent buyer of insurance company Ethniki Asfalistiki.

One of Europe’s biggest funds, France’s Ardian, two Australian funds, Macquarie and First Sentier, Italy’s infrastructure fund F21, Canadian investment corporation British Columbia Investments (BCI), Chinese consortium China South Power Grid – China Three Gorges, and fellow Chinese firm Guangzhou Power make up the other seven first-round entries.

DEDDIE/HEDNO’s new business plan, covering 2021 to 2024 and carrying investments totaling 3.5 billion euros, is a key driver behind the considerable interest, as is a yield rate of approximately 7 percent offered by the operator.

Standout features of the operator’s new business plan include an 850 million-euro project entailing the installation of 7.5 million digital power meters around the country, whose tender is nearing; an addition, to networks, of fiber optics for telecommunication and 5G services; as well as projects for undergrounding, upgrading and modernizing networks in anticipation of mass investments in RES units.

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

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.

 

Operator DEDDIE 49% sale first-round bids submitted today

State-controlled power utility PPC and the government will be hoping today’s first-round, non-binding deadline for expression of interest in the 49 percent sale of the utility’s subsidiary DEDDIE/HEDNO, the distribution network operator, can attract a solid turnout of formidable bidders.

An onslaught of criticism against DEDDIE/HEDNO over the past few days following widespread power outages caused by Medea, as the extreme weather system was dubbed, certainly has not been good for the operator’s reputation.

On the other hand, the network’s deficiencies, exposed by extensive weather-related damages in the wider Athens area, lends tremendous support to the need of a powerful investor ready to finance the network’s badly needed upgrade, expected to cost 3.5 billion euros.

Expectations of a solid investor turnout have been high in the lead-up to today’s first-round deadline. PPC plans to announce this sale’s first round participants during the day.

Many prominent funds have shown interest in the sale but the identities of those that will follow through and participate have remained unclear. It also remains unclear if any of these funds will establish partnerships – for the DEDDDIE/HEDNO sale – with European network operators.

A market test staged in December, as well as contact with interested parties, has indicated that the American funds KKR and Blackrock, Australia’s Macquarie Group, and France’s Ardian, could participate in the sale.

The managerial rights to be attached to the minority 49 percent stake will be bolstered to not block potential buyers from crucial decisions.

DEDDIE/HEDNO possesses a regulated asset base worth over 3 billion euros, networks totaling 242,000 km in length, 240 high-voltage substations, 163 low-voltage substations, a 5,800-member workforce, and a client base numbering 7.5 million.

The company caters to annual demand of 43.194 TWh and 57,752 RES units with a total capacity of 3,926 MW.

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

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

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

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.

Major players meet DESFA sale’s first-round deadline

Local energy market authorities have declared as a success the turnout of virtually all the major European operators for a renewed international tender offering 66 percent of DESFA, Greece’s natural gas grid operator.

Though still at a preliminary stage, the sale procedure, whose deadline for first-round non-binding offers expired yesterday, has drawn two formidable consortiums that appear prepared to make serious bids for the DESFA majority stake on offer.

One of these fancied teams is made up of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie and the other Romania’s Transgas and France’s GRTgaz.

The first of these two bidding teams appears to be the firm favorite as three of its members also hold stakes in the TAP consortium developing the TAP gas pipeline, to run across northern Greece, through Albania and the Adriatic Sea to Italy. The emergence of the TAP-related entry for the DESFA sale certainly adds clout and bidding potential to the sale procedure.

The second major bidding team should not be underestimated. France’s GRTgaz stands one of the EU’s biggest energy sector firms operating the most extensive network of gas pipelines.

Regasificadora del Noroeste S.A, a second Spanish firm that met yesterday’s deadline, can be regarded as an outsider. It operates a pipeline network in Spain’s northwestern region of Galicia.

Questions linger over the prospects of other tender participants such as Qatar’s Powerglobe, US firm Intergrated Utility Services and Australian entry Macquarie Infrastructure, a non-EU group taking part as one of its subsidiaries is linked to an Italian network operator.