Paneuropean OIl

Italy’s Edison determined to keep 50% stake in Elpedison

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Italy’s Edison does not intend to sell its 50 percent stake in energy retailer Elpedison to its partner in the joint venture, Helleniq Energy, formerly named Hellenic Petroleum (ELPE), a representative of the Italian company has indicated following latest talks between highly ranked officials of the two sides in Athens earlier this week.

Helleniq Energy and Edison, preparing to end a 15-year association as equal partners in energy firm Elpedison, are currently evaluating prospective offers for the other side’s 50 percent, but neither side has revealed any price tag.

The partner to offer the biggest sum is expected to take full control of Elpedison, estimated to be worth between 400 and 500 million euros, according to market officials.

Helleniq Energy’s CFO Vassilis Tsaitas and his Edison counterpart Ronan Lory were joined by other company officials from both sides for the meeting in Athens earlier this week.

The Italian company appears determined to remain in the Greek market for further investments in Elpedison that could make the energy retailer competitive again, an Edison official indicated.

The Greek government is keeping a close watch on developments as the Greek State holds a 31.18 percent stake in Helleniq Energy through TAIPED, the Greek privatization fund. Paneuropean Oil & Industrial Holdings, a member of the Latsis group, is the main shareholder with a 40.41 percent share.

Should Helleniq Energy acquire Edison’s 50 percent stake in Elpedison, it could opt to sell the company to another corporate group, Mytilineos being the likeliest potential buyer, sources believe.

Evangelos Mytilineos, chairman and CEO of the Mytilineos energy and metals group, has set a 30 percent market-share target for his corporate group’s energy retailer Protergia by 2026. The supplier currently holds a 15.08 percent share and Elpedison’s share is at around 6 percent.

 

Helleniq Energy, Edison continue talks to part ways on Elpedison

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Helleniq Energy, formerly named Hellenic Petroleum (ELPE), and Italy’s Edison are preparing to end a 15-year association as equal partners in energy firm Elpedison.

Officials of both companies are currently evaluating prospective offers for the other side’s 50 percent. The partner to offer the biggest sum is expected to take full control of Elpedison.

Helleniq Energy will seek to acquire Edison’s 50 percent stake in Elpedison and may then opt to sell the energy firm to another corporate group, Mytilineos being the likeliest potential buyer, sources have informed.

During a presentation at the recent Delphi Economic Forum, Helleniq Energy’s CEO Andreas Siamisiis spoke extensively on a 4 billion-euro investment plan at the group’s refineries in Athens and Thessaloniki but made no mention of Elpedison.

This omission has further fueled speculation that Helleniq Energy may be preparing to sell Elpedison if it acquires partner Edison’s stake in the company.

Elpedison holds a portfolio of just under 316,000 customers in Greece’s retail energy market and two power plants offering a total capacity of 820 MW.

Edison executives will be in Athens on Monday for a new round of discussions with Helleniq Energy officials, the sources noted.

Officials of the two sides have already met on numerous occasions to discuss details of their nearing separation. However, a top-level meeting between the CEOs of Helleniq Energy and Edison, Andreas Siamisiis and Nicola Monti, respectively, has yet to take place.

The Greek State will also have a say in the matter as it holds a 31.18 percent stake in Helleniq Energy. Paneuropean Oil & Industrial Holdings, a member of the Latsis group, is the main shareholder with a 40.41 percent share.

Extra 20% of ‘undervalued’ Helleniq Energy to be listed

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Greek privatization fund TAIPED and the Latsis group’s Paneuropean Oil & Industrial Holdings, the two main shareholders of Helleniq Energy, formerly named Hellenic Petroleum (ELPE), appear to have decided to list a further 20 percent stake of the company’s shares on the Athens stock exchange.

TAIPED currently holds a 35.48 percent stake of Helleniq Energy, and Paneuropean Oil & Industrial Holdings holds 17.4 percent, while 17.4 percent of Helleniq Energy’s shares are already being traded on the Athens bourse.

Discussion regarding the additional allocation of a bundle of Helleniq Energy shares on the Athens stock exchange began as part of broader strategy pursued by the privatization fund to optimize the company’s shares that are publicly traded.

A further privatization effort in 2019 did not succeed and, since then, TAIPED has sought the best possible way to exploit this asset.

According to sources, the privatization fund and Paneuropean Oil & Industrial Holdings will each contribute 10 percent stakes in Helleniq Energy to the listing.

The intention of this move is not to lure a strategic investor but, instead, to increase the company’s free float, the sources added.

Just months ago, Helleniq Energy’s management suggested the company’s share price does not reflect the true value of the energy group. Also, the company’s restructuring and Vision 2025 investment plan, now being implemented for greater emphasis on green-energy activities, have so far failed to boost the share price of the energy group.

The latest plan, sources noted, will seek to deliver more goodwill to shareholders and reflect the group’s true value on the board.

Greek State to no longer control majority of ELPE board

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Privatization fund TAIPED’s deferral, by a week, for May 28, of revisions concerning Hellenic Petroleum ELPE’s corporate agreement and green-focused transformation plan highlights the difficulties faced in the effort to find a right balance between the petroleum group’s two main shareholders, the Latsis group’s Paneuropean, holding a 47 percent stake, and the Greek State, holding a 35.5 percent stake.

The Greek State’s presence on ELPE’s 11-member board is expected to be reduced from seven, at present, to four on the new board, following fears of an even smaller presence.

Paneuropean supports the revisions and is expected to endorse them at the general shareholders’ meeting on May 28.

The main opposition Syriza party has intensified its criticism of the government’s handling of the ELPE plan, accusing the administration of putting the Greek State’s interests at stake.

The government will do what it must to ensure the interests of the Greek State as well as ELPE, so that the company may contribute to further economic growth in Greece, energy minister Kostas Skrekas noted earlier this week.

ELPE transformation ending State’s board majority

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Hellenic Petroleum ELPE is moving ahead with a full transformation, both in terms of investments, taking a turn focused on green energy, as well as administratively, through a revision to soon nullify a 2003 agreement that has given the Greek State, holding a 35.5 percent stake, majority rights, represented by 7 of 13 board members.

Legislation ratified last year and set to be implemented on July 17 will give company shareholders board representation rights reflecting their respective stakes in ELPE.

Besides the Greek State’s 35.5 percent share, the Latsis group’s Paneuropean holds a 47 percent stake in ELPE, while the remaining 17.5 percent is free-floating.

The company is scheduled to hold a general shareholders’ meeting on June 30, when a new board is expected to be voted in.

It is believed that ELPE’s administrative duties will be taken on by a new holding company, now in the making, possibly with its headquarters abroad. Its board membership is expected to be trimmed to 11 from ELPE’s 13 at present.

The ELPE group’s subsidiaries as well as stakes in various companies, including refineries, petroleum product trading companies, namely EKO and BP, as well as ELPE Renewables, energy supplier Elpedison and plastic packaging firm Diaxon, will all be transferred to the new holding company, sources have informed.

ELPE privatization headed for delay, lenders have approved

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A privatization plan for part of the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE) will be delayed for next year as current market conditions are not favorable, while the procedure could even be reassessed from scratch, sources have informed.

This delay, sources said, has already been approved by the country’s lenders, who have admitted the ELPE privatization has never represented a restructuring plan for the Greek economy, but, instead, is a cash-collecting initiative incorporated into the wider effort to reduce public debt.

A government plan to sell the Greek State’s ELPE stake through the Athens bourse was recently reported as finalized and ready for implementation next month.

The Latsis group’s Paneuropean Oil, ELPE’s main shareholder with a 45.5 percent stake, has been allowed a more influential administrative role at ELPE since the summer’s Greek election brought in a new government.

Energy minister Costis Hatzidakis, speaking in Greek Parliament, has noted there is no intention to sell the Greek State’s entire ELPE stake. It remains unclear what the level of the Greek State’s percentage in ELPE could be following the privatization.

TAIPED, the privatization fund, holds the Greek State’s stake in ELPE. A sale of this stake through the bourse would require a legislative revision.

Greek State ELPE stake could be sold within next 2 months

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The government is pushing ahead with its plan to sell, through the bourse, part of the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE) in a procedure that is expected to swift and completed within November.

The sale’s consulting duo, National Bank and Goldman Sachs, has launched a related market test to identify interested parties through a book-building procedure.

The level of interest in the sale will determine the percentage of the Greek State’s ELPE stake to be offered to investors. At this stage, the government does not appear willing to disengage the Greek State from its entire 35.48 percent in the petroleum firm.

ELPE’s share has slid 6.4 percent over the past four days, from 9.11 euros to 8.52 euros.

The Latsis Group’s Paneuropean Oil, ELPE’s main shareholder with a 45.5 percent stake, has decided not to participate in the sale, sources have informed.

The two shareholders had joined forces to offer investors an overall 50.1 percent stake in ELPE last April, but the sale failed to procedure a result.

Prior to that sale attempt, the former Syriza government’s energy minister Giorgos Stathakis secured a controlling 51 percent stake for the Greek State in Exploration Holding Company, to which all of ELPE’s hydrocarbon exploration and production licenses were transferred. The holding company’s role could change.

Follow-up ELPE sale effort to involve Greek State stake only

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A follow-up sale effort offering a stake in Hellenic Petroleum ELPE will only involve the Greek State, holding a 35.48 percent share of the petroleum company, while the Latsis Group’s Paneuropean Oil, the main shareholder with a 45.5 percent stake, has decided not to participate, reliable sources have informed energypress.

An initial ELPE sale attempt, in which the Greek State participated with 20 percent and Paneuropean Oil 30.1 for a concurrent sale offering 50.1 percent, failed to attract investors.

During his speech at the 84th Thessaloniki International Fair, Prime Minister Kyriakos Mitsotakis made clear the ELPE privatization is a top-priority sale along with the Greek State’s stakes in gas utility DEPA and Athens International Airport.

An official agreement between ELPE and the Latsis Group on the privatization is expected within days, the sources noted.

The two sides also appear to have agreed to dismantle an ELPE holding company whose assets include the petroleum firm’s hydrocarbon exploration and production licenses.

If so, prospective bidders ELPE bidders could hail from the upstream sector.

Latsis group unlikely to take part in follow-up ELPE sale

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The Latsis group, whose Paneuropean Oil is the main shareholder of Hellenic Petroleum ELPE with a 45.5 percent stake, appears unwilling to participate in a follow-up sale effort for ELPE with the Greek State, holding 35.5 percent of the petroleum company.

The Greek State had offered 20 percent and Paneuropean Oil 30.1 for a concurrent sale effort that failed to draw investors.

A refusal by the Latsis group to become involved in a second sale attempt would leave the government with two basic options – one, to offer the Greek State’s 35.5 share of ELPE through a tender; the other, to offer this stake through the bourse, either as one lump offering or a succession of smaller packages.

Pundits believe a gradual sale through the bourse would be the wrong way to go, contending it would amount to a discount offering.

If a sale through the bourse is eventually chosen, a one-off sale of the Greek State’s 35.5 percent appears the most probable course of action. However, none of the options have been ruled out. A final decision is still ahead. A new administration at ELPE was assembled just two days ago.

Latsis Group, government in talks for optimal ELPE solution

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Business magnate Spiros Latsis, director of the Latsis Group of companies, discussed his investment plans for Greece, including Paneuropean Oil’s 45.5 percent stake in Hellenic Petroleum (ELPE), at a meeting yesterday with Prime Minister Kyriakos Mitsotakis, sources informed.

The entrepreneur made clear that he is looking for an optimal solution for ELPE, according to sources. The petroleum company’s recently failed sale will be relaunched, the Prime Minister noted while presenting his administration’s program.

Any ELPE sale relaunch and its shape will greatly depend on upcoming talks between the newly appointed energy minister Costis Hatzidakis and Paneuropean Oil officials.

The outcome of these talks will determine whether the sale’s relaunch will share the same features as the previous effort.

The Greek State had offered 20 percent of its 35.48 percent share in ELPE and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake for a concurrent sale effort that failed to draw investors.

Paneuropean’s future stake in a hydrocarbons holding company, Exploration Holding Company, will also be pivotal for the ELPE sale.

The previous Syriza government’s energy minister Giorgos Stathakis had secured a 51 percent stake of the holding company for the Greek State. This development gave the Greek state control of ELPE’s existing exploration and production rights.

Prior to this, Paneuropean Oil had reached an agreement for the Greek State’s share in the holding company to be at 25 percent.

 

Gov’t examining DEPA options, including holding co. model

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The newly appointed energy ministry is examining alternatives for the sale of gas utility DEPA, one of these being an older plan proposed by the privatization fund TAIPED for the establishment of a holding company that would house three subsidiaries representing the utility’s commercial, network and international project interests.

This plan would involve offering stakes in the commercial and network subsidiaries to investors while the international projects division would remain in the holding company portfolio.

The privatization fund’s proposal, presented about a year-and-a-half ago, foresaw the sale of a majority stake in the commercial entity and a minority stake in the network company.

This plan differs greatly to a DEPA split plan legislated by the previous Syriza government in March.

Contrary to the Syriza effort, the holding company plan entails a partial, not full, break from DEPA of the aforementioned business activities.

Meanwhile, decisions on details concerning a Hellenic Petroleum ELPE sale relaunch have not been reached. The new energy ministry will first need to hold talks with Paneuropean Oil, a member of the Latsis group, holding a 45.5 percent stake in ELPE. It remains unclear whether Paneuropean Oil would be willing to participate in any renewed sale attempt for ELPE.

On Saturday, Prime Minister Kyriakos Mitsotakis indicated a new ELPE sale procedure would be launched following the previous effort’s failure to produce a result. The Greek State offered 20 percent of its 35.48 percent share in ELPE and Paneuropean Oil made available 30.1 percent of its 45.47 stake.

It remains unclear if investors would consider buying the Greek State’s 35.48 percent stake held in ELPE should Paneuropean Oil refuse to take part in the sale.

 

 

 

TAIPED awaiting ND position on ELPE, DEPA privatizations

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The privatization fund TAIPED is awaiting the newly elected conservative New Democracy government’s strategy on energy sector privatizations so that it can reshape, from scratch, as it appears, the sale procedures for Hellenic Petroleum ELPE and gas utility DEPA.

The newly appointed energy minister Costis Hatzidakis may have highlighted the importance of these two privatizations during proceedings at the ministry’s recent handover ceremony, describing both sales as agenda priorities. However, everything concerning both will need to be placed on hold as emphasis must currently be placed on the troubled power utility PPC and the effort to find a successor for chief executive Manolis Panagiotakis, who resigned from his post at the state-controlled company shortly after the ND’s victory in the July 7 election.

TAIPED officials also need to stage a first meeting with finance minister Hristos Staikouras, during which talks on the shape of the new ND government’s privatization strategy preferences can be discussed.

ELPE’s future administrative shape, following the recent failure of an initial privatization effort, remains in the dark. Pundits have already ruled out the possibility of a repeat of this sale effort – that is, a concurrent sale of stakes by the petroleum group’s two main shareholders, the Greek State, holding 35.5 percent of ELPE, and the Latsis Group’s Paneuropean, holding 45.5 percent. It is also unknown, if not doubtful, if Paneuropean will be willing to participate in any new ELPE sale procedure.

For the time being, ELPE’s administration is focused on the preparation of the group’s first-half results, expected to be officially reported in late August, as well as an imminent approval in Greek Parliament of hydrocarbon exploration and production licenses secured – as part of a consortium also involving ExxonMobil and Total – for two offshore blocks west and southwest of Crete.

All is currently quiet along the DEPA front. The ND party, according to party sources during the lead-up to the elections, believes the gas utility must be privatized as one entity, not two, through a split of its commercial and infrastructure divisions, as was envisioned by the previous leftist Syriza government.

The DEPA-related intentions of ELPE, holding a 35 percent share of the gas utility, will be pivotal.

 

 

 

 

 

ND, if elected, wants 65% DEPA sale, not split and sale

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The main opposition New Democracy party, if victorious in the July 7 snap elections, intends to privatize gas utility DEPA as one corporate entity, through the sale of a 65 percent stake, rather than through a split-and-sale procedure offering separate trading and infrastructure entities, as has been promoted by the ruling Syriza government, currently well behind in polls.

The role of Hellenic Petroleum (ELPE), holding a 35 percent share of DEPA, will be influential when the time comes to make decisions.

Up until now, ELPE has indicated it would be interested in acquiring a 65 percent stake of DEPA Trade – one of the two DEPA entities envisioned by the government for the utility’s split and sale – either alone or with Italy’s Edison, ELPE’s strategic partner.

However, ELPE’s main shareholder, the Latsis group’s Paneuropean Oil, holding a 45.5 percent share, could revise its stance if DEPA’s new sale procedure is redrafted from scratch, as would most probably be the case with a conservative ND election victory.

During a parliamentary debate in March, ND party representatives clearly opposed Syriza’s plan for a DEPA split, describing it as an unnecessary, excessive and complicated approach that would ultimately suppress DEPA’s market value.

The DEPA split, forged by the energy ministry, is not listed as a bailout term, but the country did commit itself to a reduced retail gas market presence for DEPA. This demand was met some time ago when DEPA withdrew from gas supply firm EPA Thessaloniki-Thessaly and acquired Shell’s stakes in EPA Attiki and EDA Attiki, respective supply and distribution firms covering the wider Athens area.

 

 

Ministry, TAIPED to meet for ELPE, DEPA Trade sales

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The privatization fund TAIPED and the energy ministry plan to hold talks this week in an effort to clarify matters concerning the futures of the Hellenic Petroleum (ELPE) and DEPA Trade privatizations.

The privatization plan for DEPA Trade, one of two new entities emerging from a split at gas utility DEPA, is still unclear and will be greatly shaped by the stance at ELPE, holding a 35 percent stake in DEPA.

A government-backed recruitment plan involving DEPA’s sub-contracted external associates is another factor holding back the DEPA Trade privatization, to offer investors a majority stake.

Energy minister Giorgos Stathakis is believed to have held meetings last week with the administrations of DEPA subsidiaries to request swift recruitment procedures for these external associates by the end of the current month.

Matters concerning the DEPA business plan as well as the division of DEPA’s cash reserves to DEPA Trade and DEPA Infrastructure, the other new entity emerging from the company split, appear to have been finalized.

TAIPED could launch the DEPA Trade privatization by the end of this month if ELPE’s role is clarified soon, sources noted.

An initial ELPE privatization effort, offering investors a 50.1 percent share, failed to produce a result and has impacted the DEPA sale. The country’s lenders have requested alternatives from the privatization fund.

The Latsis group’s Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort. The Greek State offered 20 percent of its 35.48 percent share in ELPE.

ELPE has expressed an interest in DEPA Trade. The petroleum group is waiting for the sale’s terms to be finalized before it decides on whether to increase ELPE’s 35 percent stake in the natural gas company or sell its share and withdraw.

 

 

DEPA Trade tender launch likely within May, minister tells

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A tender offering investors a 50.1 percent stake of DEPA Trade, one of two new entities that have emerged from a company split at gas utility DEPA, could be launched within May, the country’s top energy sector authority has noted.

The prospect, expressed yesterday by energy ministry Giorgos Stathakis on the sidelines of an annual conference held by HAEE, the Hellenic Association for Energy Economics, has been confirmed by TAIPED, which expects to launch the tender some time during the latter half of the current month.

DEPA’s leadership has declared it is set for this step. Chief executive Dimitris Tzortzis expects a business plan for the natural gas utility’s commercial interests to be ready within the next week or two.

Sub-contracted external associates hired by DEPA on a regular basis and promised job security amid the company’s transformation will be transferred to DEPA subsidiaries – Attiki Natural Gas, EDA and DEDA – before ending up on payrolls, according to the plan.

A number of investors named by DEPA in the recent past as possible buyers are expected to be joined by US and UK funds, according to the company.

As for DEPA’s cash reserves, 110 million euros will be transferred to DEPA Trade and 70 million euros to DEPA Infrastructure, the other new entity emerging from the DEPA split.

Responding to reports claiming that a tender for DEPA Infrastructure could precede that of DEPA Trade – which would represent a turnaround in the order of events as they have been presented until now – Tzortzis, the gas utility’s head, said this is theoretically possible but would require a legislative revision.

Stathakis, the energy minister, and his associates are expected to hold talks during the current week on the next ownership steps to be taken for ELPE (Hellenic Petroleum), after a recent tender offering a 50.1 percent stake failed to produce a result. This failure has impacted the DEPA sale procedure as ELPE holds a 35 percent share of the gas utility.

The Greek State offered 20 percent of its 35.48 percent ELPE share and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

 

 

 

 

ELPE ownership decisions to be sought in coming days

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The uncertainty concerning the next steps to be taken for the future ownership of ELPE (Hellenic Petroleum) could become clearer this week as the country’s lender representatives pursue their post-bailout review in Athens.

The position to be adopted by the lenders on ELPE will be particularly important on how the matter plays out. They could insist on a privatization repeat for ELPE’s 50.1 percent following the initial effort’s failure to produce a result. If so, a relaunch would not take place until after this month’s European elections, and, almost certainly, the Greek elections, due in autumn.

Attracting investors during the pre-election period would be difficult to accomplish. ELPE’s privatization is not a market restructuring measure but is purely driven by cash-collecting incentives.

The Latsis group, whose Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort, wants to hold on to its stake in the listed petroleum company, according to sources. The Greek State offered 20 percent of its 35.48 percent share in the ELPE sale.

Energy minister Giorgos Stathakis has ruled out the possibility of any sale of the Greek State’s ELPE stake through the bourse.

The sooner ELPE’s future ownership is cleared up the easier it will become for authorities to push ahead with the privatization of DEPA Trade, one of two new entities that emerged from a recent split at gas utility DEPA. ELPE holds a 35 percent stake in DEPA.

The petroleum group, which has made clear its interest for a bigger role in Greece’s natural gas market, may seek to increase its DEPA stake.

All ELPE options, including no sale, to be considered, minister notes

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All options, except for a sale of the Greek State’s share in ELPE (Hellenic Petroleum) through the bourse, will be considered following last week’s failed sale attempt through a tender offering a 50.1 percent stake of the petroleum group, energy minister Giorgos Stathakis has noted.

Decisions will be made at a future date following talks with the country’s lenders and the Latsis group, whose Paneuropean Oil contributed 30.1 percent of its 45.47 stake to the tender, the minister noted. The Greek State was offering 20 percent of its 35.48 percent share.

The possibilities include dropping the ELPE privatization all together as this sale is not a structural measure or market revision but was added to the privatization fund TAIPED’s program for cash-collecting purposes, the minister explained.

Stathakis admitted he was expecting at least one worthwhile bid from the sale’s two bidding teams.

ELPE’s total worth could reach between 5 and 7 billion euros based on international business practices estimating the market value of companies by multiplying EBITDA results several times, the minister said.

Meanwhile, TAIPED is preparing to soon launch a tender offering a majority stake in DEPA Trade, a new entity emerging from a recent split of gas utility DEPA, the minister informed.

ELPE, holding a 35 percent stake in DEPA, has expressed interest in this sale as part of its plan for a natural gas market entry.

ELPE sale ‘may be dropped’ if alternate revenue plan is found

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An ELPE (Hellenic Petroleum) privatization offering a 50.1 percent stake, whose initial tender failed to produce a result last week, could be scrapped if the government finds an alternative way of raising the sale’s anticipated 500 million euros for the country’s privatization fund, highly-ranked energy ministry sources have told energypress.

“The ELPE sale is not a structural measure or market revision but was included in the privatization fund TAIPED’s program for cash-collecting purposes as the sale price achieved would have contributed to reducing the national debt,” a source noted, indicating alternative ways of raising an equivalent amount could be sought instead of an ELPE sale relaunch.

If so, the government will need to convince the country’s lenders of an alternative fund-raising plan when they arrive in Athens next month for a third post-bailout review of the Greek economy.

The Greek State was offering 20 percent of its 35.48 percent share in ELPE and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

Glencore, an early candidate, was eventually joined by US firm Carlyle, and Dutch trading firm Vitol, the sale’s other early contender, was joined by Algeria’s Sonatrach. Neither bidding team followed through with offers last week, when the deadline for binding bids expired.

 

ELPE privatization effort fails to deliver result, next step unclear

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A tender offering a 50.1 percent stake of ELPE (Hellenic Petroleum), whose complicated make-up involved two sellers and four possible buyers, has failed to produce a result.

The Greek State was offering 20 percent of its 35.48 percent share and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

As officials had strongly suspected ahead of yesterday’s deadline for binding bids, the sale procedure did not convince participants for a variety of reasons.

In the lead-up, SPA and SHA term negotiations with the sale’s main candidates Glencore and Vitol, both trading firms, made clear that emphasis needed to be placed on protecting the association between ELPE’s main activity, refining, and the domestic market. The petroleum group currently covers approximately 70 percent of the Greek market’s needs.

Glencore, which was eventually joined by US firm Carlyle for this sale, had other ideas. During the SPA talks, it strove for the incorporation of a term that would have offered the trading company exclusive control of ELPE’s production.

Instead, clauses were introduced to the tender’s SPA to protect supply to the Greek market and maintain the country’s strategic reserves for security reasons.

This development prompted the sale’s officials to place their hopes for a result on the privatization’s other second-round qualifier, Dutch trading firm Vitol, which was latter joined by Algeria’s Sonatrach.

The Algerian state-run energy company proved to be the more interested partner of this pairing, but the political turmoil over recent weeks in Algeria, which led to the resignation earlier this week of President Abdelaziz Bouteflika, the country’s leader over the past 20 years, prevented Sonatrach from pursuing what would have been the biggest takeover in the company’s history.

It remains to be seen how the government and TAIPED, the privatization fund, will respond to the sale’s failure. TAIPED had anticipated a significant inflow of privatization revenues from the ELPE sale.

 

Binding bids for ELPE’s 50.1% due today amid uncertainty

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Binding bids for an ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake are due today, bringing one of the country’s biggest energy-sector privatizations to a crucial stage.

The Greek State is offering 20 percent of its 35.48 percent share and the Latsis group’s Paneuropean Oil is selling 30.1 percent of its 45.47 stake.

Two bidding teams have reached the privatization’s final stage. Glencore, an early qualifier, has teamed up with US firm Carlyle, while Vitol, the procedure’s other early candidate, formed an alliance with Algeria’s Sonatrach for this sale.

Their level of acceptance of the sale’s SPA and SHA terms, as well as ELPE’s financial figures, assessed in due dilligence, will become apparent later in the day.

Despite today’s bidding deadline, it still remains uncertain if the two teams will submit offers. If made, they will be unveiled later this afternoon, at 5pm.  Dossiers carrying technical details will be opened for assessment over the next few days.

Improved bids could be called for if the privatization’s terms have been met by participants.

Should the current sale effort fail to produce a result, the government will need to engage in talks with the country’s lenders on the next move for the ELPE privatization.

ELPE sale expectations, risks high as deadline day nears

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A succession of record-breaking financial results at ELPE (Hellenic Petroleum) over the past few years has boosted the company’s expectations of an elevated sale price in a privatization offering a 50.1 percent stake.

Even so, whether the sale’s two bidding teams both end up submitting binding bids on Wednesday, the deadline day, remains a 50-50 situation, officials have noted, pointing out tough sale-term negotiations that have taken place between the sellers – the Greek State, offering 20 percent of its 35.48 percent share, and the Latsis group’s Paneuropean Oil, selling 30.1 percent of its 45.47 percent share – and the possible buyers.

The privatization’s two early qualifiers, Glencore and Vitol, have pressed hard for sale-term improvements. These demands then increased with the emergence of US firm Carlyle and Algeria’s Sonatrach as respective partners of the initial candidates.

Despite the privatization’s plan for the sale of a 50.1 percent majority, the Greek State has insisted on maintaining veto rights for crucial decisions of national significance.

TAIPED, the state privatization fund, was forced to delay the binding-bids deadline and most recently rescheduled the date for April 3 from March 29.

ELPE’s EBITDA figure averaged 763 million euros between 2015 and 2018, more than double the 350 million-euro average achieved between 2011 and 2014.

State control planned for ELPE hydrocarbon holding company

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The Greek State will hold a majority 51 percent stake and ELPE (Hellenic Petroleum) 49 percent in a new hydrocarbon holding company to serve as an umbrella corporation for various firms, existing and future, with ELPE exploration and production rights in various areas, according to a government plan incorporated into ELPE’s ongoing privatization effort offering investors 50.1 percent of the petroleum firm.

The holding company is intended to hold minority interests in most of these firms, and majority stakes in ventures where, until now, ELPE has operated without partners, such as an Arta-Preveza onshore block and a Gulf of Kyparissia license.

The holding company plan currently includes five subsidiaries: ELPE Arta-Preveza (ELPE 100%); ELPE Kyparissia Gulf (ELPE 100%); Gulf of Patras (ELPE 50%, as the operator, and Edison 50%); Ionian Sea Block 2 (Total 50%, as the operator, ELPE 25% and Edison 25%); Crete (Total 40%, as the operator, ExxonMobil 40% and ELPE 20%).

Work on the prospective holding firm’s statute is nearing completion, according to energypress sources. However, an energy ministry draft bill to establish the Greek State as the majority stakeholder of the new holding company and carve out a 49 percent share for ELPE’s prospective buyer remains pending.

Binding offers for the ELPE sale are now expected to be deferred until January.

Over the past few weeks, the energy ministry has been holding talks with Paneuropean, offering 30.47 percent of 45.47 percent held in ELPE, as well as ELPE’s two contenders, Glencore and Vitol, in search for a new arrangement that would increase the Greek State’s control of the new holding company from 25 percent to no less than a 51 percent majority. The Greek State is offering 20.5 of its 35.5 percent stake in ELPE.

 

ELPE holding company state control thoughts new sale delay

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A local Capital Market Commission demand that would have required the eventual preferred investor in the ELPE (Hellenic Petroleum) to make a public offering to other company shareholders may have been dropped but a new stumbling block, possibly bigger, has surfaced in the ELPE sale offering investors 50.1 percent as the government is now pushing for a plan that would maintain the Greek State’s control of hydrocarbon exploration and production rights at all licenses already awarded to ELPE. These rights would be transferred to a state-controlled holding company.

The government appears to be pursuing a revised arrangement that would offer the Greek state control of ELPE’s existing exploration and production rights with a stake of at least 51 percent, even 100 percent.

Paneuropean, offering 30.47 percent of 45.47 percent held in ELPE to the sale, had reached an agreement last April with the government for the Greek State, offering 20.5 of its 35.5 percent stake, to hold a 25 percent stake, not 51 percent or 100 percent, in the new holding company, to be named Exploration Holding Company. This stake would eventually rise to 36.25 percent, directly and indirectly, for the Greek State.

However, the energy ministry now wants a reexamination of April’s agreement, energypress sources informed.

Over the past few weeks, the ministry has been holding talks with Paneuropean as well as ELPE’s two contenders, Glencore and Vitol, in search for a new arrangement that would increase the Greek State’s control of the new holding company from 25 percent to no less than a 51 percent majority, if not total control.

Union action no threat to PPC, ELPE sales, officials assure

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The energy ministry and TAIPED, the state privatization fund, have both reassured respective action taken by union groups representing the main power utility PPC and ELPE (Hellenic Petroleum) will not disrupt ongoing privatization efforts for either.

All necessary steps have been made to ensure smooth progress of a bailout-required sale of PPC lignite units and mines representing 40 percent of the power utility’s lignite capacity, the energy ministry has  declared.

As for the ELPE sale, TAIPED – representing the Greek State, offering 20.5 of its 35.5 percent stake along with Paneuropean’s 30.47 percent of 45.47 percent held – has opted not to comment on the mobilization efforts of PSEEP, the ELPE workers union group, suggesting it does not fear a disruption of the 50.1 percent sale.

Genop, the PPC union, has filed a case to the Council of State, Greece’s Supreme Administrative Court, seeking a rejection of environmental terms concerning the Meliti power facility included in PPC’s sale package. This move’s ultimate aim is to delay the overall sale.

PSEEP has taken triple action, filing its ELPE case to the local Capital Market Commission, which has prompted a public offering procedure dispute, London bourse authorities, and European Parliament’s Committee on Petitions (PETI), believing a violation of European law exists.

 

ELPE buyer will need to acquire up to 70% in public offering

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The eventual buyer of a 50.1 percent stake of ELPE (Hellenic Petroleum) offered through an international tender, now down to two contenders, Dutch enterprise Vitol and Switzerland’s Glencore, will also need to buy shares offered by smaller shareholder groups at the same price, through a public offering procedure, the legal division at Greece’s Capital Market Commission has determined.

Subsequently, Vitol or Glencore will most likely need to spend additional amounts to complete the privatization. Neither of the two companies, both international powerhouses, would be troubled by the extra financial demands of such an outcome, expected to reach several hundred million euros more, to acquire an overall ELPE stake that could end up totaling around 70 percent, pundits told energypress.

However, the need to stage a public offering procedure for the ELPE share transfer could impact the amount Glencore and Vitol will be willing to offer for the 50.1 percent stake as they may also consider the additional amounts that could be needed for the acquisition of shares from the other shareholder groups.

The eventual buyer of ELPE’s 50.1 stake will have no real need to acquire an additional stake for a 70 percent holding, as the initial lot, alone, secures a controlling stake.

Paneuropean, ELPE’s main shareholder owning 45.47 percent, is selling 30.47 percent, while the Greek State is selling 20.5 of its 35.5 percent stake.

From there on, private shareholders hold 7.7 percent, foreign institutional investors a further 6.5 percent, and Greek institutional investors 4.8 percent. These three shareholder groups, representing a 19 percent stake or a total of 58,233,522 shares, will need to be given the opportunity to sell at the share price level to be secured by Paneuropean and the Greek State, according to the Capital Market Commission.

ELPE’s 50.1 percent is currently estimated to be worth about 1.1 billion euros. The sale of an additional 19 percent could increase the amount the buyer will need to spend to roughly 1.5 billion euros.

It remains unclear as to why the matter has only just emerged. Capital Market Commission officials contend their legal team has been working on the issue for months.

According to the current legal framework, share transfers exempted from mandatory public offering procedures are limited to privatizations held to benefit the public sector. ELPE’s sale cannot be exempted from public offering procedures as Paneuropean, the main shareholder and biggest seller, is offering 30.47 percent as a private-sector enterprise with an objective to maximize profit, experts explained.

Meanwhile, Vitol representatives did not turn up to ELPE’s Aspropyrgos and Elefsina refineries for on-site inspections yesterday, as had been scheduled, but were informed at an alternative secret location to avoid union group resistance. A week earlier, Glencore representatives acted likewise.

 

 

 

 

 

ELPE sale entering advanced stage, fairness adviser sought

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Switzerland’s Glencore and Dutch enterprise Vitol, the two qualifiers for the second round of a Hellenic Petroleum (ELPE) international tender offering a 50.1 percent stake, are believed to have just about completed their financial and technical assessments of the oil company.

Binding second-round offers now appear very likely to be submitted some time between September 20 and early October.

TAIPED, the state privatization fund, has just announced a tender for a fairness opinion report. Interested parties willing to take on the task have until September 5 to submit their offers.

The privatization fund has set an August 14 deadline for an additional tender inviting independent evaluators to calculate a nominal price for ELPE’s 50.1 percent up for sale.

Both deadlines indicate that the sale procedure has advanced to a crucial stage.

Glencore and Vitol have already processed information stored in ELPE’s virtual data room set up for the privatization, and, as a follow-up, are soon expected to carry out on-site inspections of ELPE’s refineries.

Any possibility of a third candidate joining forces with one of the two qualifiers for the establishment of a consortium has now been ruled out. The emergence of funds as partners is still being speculated but related reports remain unconfirmed.

Current estimates for ELPE’s 50.1 percent range between one and 1.2 billion euros. TAIPED is selling 20 percent of its 35.48 percent ELPE stake, while Paneuropean Oil, a member of the Latsis group, has agreed to offer 30.1 percent of its 45.47 percent stake in the oil company.

 

‘No ELPE sale Plan B’; workers want Latsis group to keep stake

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There is no Plan B for the privatization of ELPE (Hellenic Petroleum), offering a 50.1 percent stake of the Greek petroleum firm, plus managerial rights, and the agreement reached with the country’s lenders will lead to new negotiations, from scratch, should the current sale procedure fail to produce results, energy ministry sources have informed in response to yesterday’s claims by union members of an alternative plan entailing a bourse placement of the Greek State’s stake if the sale, orchestrated by TAIPED, the state privatization fund, does not move on.

Members of PSEEP, the ELPE workers union, yesterday made a public appeal to the Latsis group, controlling a 45.47 percent of ELPE through Paneuropean Oil, to not contribute its stake to the sale. The Greek State currently holds a 35.5 percent stake of ELPE.

PSEEP union officials are expected to reiterate this appeal at a meeting they have requested with the Latsis group, whose intentions remain unclear.

Certain sources contend the Latsis group has offered its consent for the sale to proceed, following a request by the government, which has agreed to a specific privatization plan for ELPE.

Even so, it has become apparent that the Latsis group could re-examine its position should the current privatization plan by cancelled.

The ELPE sale effort, originally presented as a fast-track procedure to be completed in autumn, appears to have fallen well behind schedule.

Switzerland’s Glencore and Dutch enterprise Vitol, two of five first-round applicants, have been presented as the favorites to advance to the next round, but a short list of qualifiers has yet to be officially announced. A list of the three disqualified bids has been announced by the privatization fund.

The delayed delivery of the finalized list of qualifiers has been attributed to precautionary steps being taken by the privatization fund in order to avoid any reasons for legal action by the disqualified bidders. Such an outcome would further delay the sale.

It is believed that legal challenges are already being prepared by some of the disqualified bidders. Whatever the case, the submission of binding bids within July and the declaration of a winning bidder in autumn, as initially scheduled in the fast-track sale plan, both seem to have developed into impossible targets.

ELPE 50.1% sale aiming to attract 5-6 majors in first round

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Expressions of interest by five or six big international firms, either alone or as consortium members, for the ELPE (Hellenic Petroleum) privatization, offering a 50.1 percent stake, would represent a major success, a pundit has told energypress, reflecting an overall view of the sale effort’s prospects.

Attracting investors for a Greek refinery with a total equity value of 2.4 billion euros, which should secure a sum of between 1.2 and 1.3 million euros for the stake being sold, represents an enormous challenge, the source contended.

ELPE may be a local giant but represents no more than a small to medium-sized regional power from a global refining industry perspective, which should impact the sale price.

TAIPED, the state privatization fund, has just extended the privatization’s expression of interest deadline, a first-round procedure, to May 30 from May 18, the objective being to satisfy as many investor queries as possible, offer more time and, ultimately, maximize the turnout.

Both TAIPED and ELPE know well that a greater number of participants in the international tender will increase the likelihood of a bidding war and higher bids, as was underlined by the recent DESFA (natural gas grid operator) tender.

A wide gamut of possible investors, including refining, exploration and production firms, as well funds, has so far been approached by the ELPE sellers.

It remains to be seen how the government’s effort to secure a solid hydrocarbon role for the Greek State following negotiations with ELPE co-shareholder Paneuropean, a member of the Latsis group, will affect ELPE’s sale price.

The Greek State currently holds a 35.5 percent stake of ELPE and Paneuropean Oil controls a 45.47 percent stake.

An agreement has been reached for the establishment of a holding company as an umbrella for separate companies to each represent exploration and exploitation rights secured by ELPE for various blocks around Greece – Arta-Preveza; northwest Peloponnese; Gulf of Patras; Block 2, west of Corfu; and Gulf of Kyparissi.

Blocks west and southwest of Crete and in the Ionian Sea will also be incorporated into the holding company if ongoing tenders that have drawn bids from ELPE, via consortiums, produce results.

The Greek State is planned to control 36.25 percent of the holding company, either directly or indirectly, following the ELPE privatization.

 

 

 

Repsol, Eni among investors interested in ELPE’s 50.1%

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Repsol is seriously considering taking part in an international tender offering 50.1 percent of ELPE (Hellenic Petrolem), announced just days ago, energypress sources have informed.

The Spanish company, already active in Greece’s hydrocarbon exploration and production market, recently formed a partnership with ELPE to submit a joint bid for an offshore block in the Ionian Sea.

Repsol meets all the ELPE tender’s strict criteria – financial, technical and geopolitical – set by TAIPED, the state privatization fund, in association with the sellers, the Greek State and Paneuropean Oil, a member of the Latsis group.

The Spanish firm maintains a strong presence in the refining sector. Its investments in this domain have totalled some 4 billion euros over the past few years. Repsol operates six industrial refineries. In 2016, Repsol’s assets were worth a total of 39.2 billion euros while the enterprise posted a total turnover figure of 36.3 billion euros and an operating profit of over two billion euros.

In the exploration and production field, Repsol has certified deposits of 2.3 billion barrels and is producing 690,000 bpd. Its refining capacity exceeds one mllion bpd.

Another major European petroleum firm, Italy’s Eni, is also believed to be closely monitoring the ELPE tender.

According to the tender’s terms, investors must be able to prove they possess readily available investment amounts worth at least two billion euros.

TAIPED reserves the right to eliminate any interested investor if such a course of action is deemed necessary by the Greek State for protection of national interests, energy securtity and energy supply.

A May 18 deadline has been set for first-round offers. Interested parties have until May 9 to enquire about the international tender’s terms.

 

 

 

Geopolitical factors to restrict ELPE tender participation

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Geopolitical factors constraining the range of participants in order to safeguard matters such as national and regional security will inevitably be incorporated into the terms of an international tender offering 50.1 percent of ELPE (Hellenic Petroleum), expected to be announced by TAIPED, the state privatization fund, any day now, possibly even today.

Though the terms to be applied to the ELPE tender remain unclear, Russian, Iranian and Chinese players, for example, stand little chance of emerging as candidates, given the current geopolitical climate in the southeast Meditteranean, polarized by US-Russian tension.

Also, European powers such as Germany, France and Italy have been requesting increasingly strict measures from Brussels for protection of strategically important European enterprises against Chinese acquisitions. ELPE belongs to this category.

In the past, Russia’s Rosneft and Lukoil, Iran’s NIOC and a number of Asian petroleum groups have expressed interest in ELPE.

For potential buyers, ELPE clearly represents a platform offering market penetration opportunities in the wider region. New hydrocarbon discoveries in Egypt, Cyprus and Israel have increased the regional importance of ELPE. The two Russian firms Rosneft and Lukoil currently dominate the region.

Echoing this growing regional interest, the Greek State managed to forge an agreement through which it will maintain a 36.25 percent share of ELPE’s hydrocarbon interests following the sale of ELPE’s 50.1 percent share to strategic investors.

The Greek State currently holds an overall 35.5 percent stake of ELPE and Paneuropean Oil, a member of the Latsis corporate group, controls a 45.47 percent stake. The co-shareholders recently struck a deal, enabling the tender, offering 50.1 percent, to proceed. The Greek State and Paneuropean Oil will each end up with 15 percent stakes.

ELPE’s value, based on yesterday’s closing share prices, is 2.56 billion euros, meaning a 50.1 percent should exceed 1.2 billion euros. The sale of a majority stake could fetch more than 1.5 billion euros. ELPE posted a record operating profit of 834 million euros for 2017.