Regasificadora del Noroeste

Follow-up DESFA bids submitted, WACC level may subdue offers

Posted on by admin

UPDATE

Two consortiums participating in the natural gas grid operator DESFA’s international tender offering a 66 percent stake submitted their follow-up offers today as first-round offers, both over 400 million euros, were less than 15 percent apart. TAIPED, the state privatization fund, included a term requiring additional bids in such a case to generate the highest possible sale price.

Energypress previously reported:

DESFA, the natural gas grid operator, may have posted a spectacular operating profit increase of 70 percent and impressive cash deposits amounting to 228 million euros, but the firm’s subdued weighted average cost of capital (WACC), as well as the rejection by authorities of a steady WACC level proposal for the operator requested by bidders taking part in an ongoing international tender offering a 66 percent stake, could keep offers below 500 million euros, pundits believe.

Two consortiums participating in DESFA’s international tender are expected to submit their follow-up offers today as first-round offers, both over 400 million euros, were less than 15 percent apart. TAIPED, the state privatization fund, included a term requiring additional bids in such a case to generate the highest possible sale price.

Local officials have been optimistic in the lead-up and expect the new offers to reach close to, or even exceed, 500 million euros.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to participate in the DESFA tender. All three hold key stakes in the TAP consortium. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Just days ago, RAE, the Regulatory Authority for Energy, set annual WACC levels for IPTO, the power grid operator, at 7 percent for 2018, 6.9 percent for 2019, 6.5 percent for 2020 and 6.3 percent for 2021. This is seen as a precursor for DESFA rates to be set by RAE within the current year.

DESFA’s bidders had sought a steady network usage rate for the gas grid operator during an earlier stage in the tender.

The eligibility of both bidding teams was thoroughly inspected by authorities during the processing stage of first-round offers, which took over a month to complete. As a result, the new offers to be submitted today should be unsealed very quickly, by Friday the latest, unless new funding sources are added to any of the two teams.

In a previous and unfinished sale attempt that also offered a 66 percent of DESFA, Azerbaijan’s Socar was declared the prefered bidder with a bid of 400 million euros. At the time, five years ago, when Greece’s country risk factor was higher, the operator’s 66 percent had been estimated to be worth 330 million euros.

 

New DESFA offers set to be submitted, and unsealed by Friday

Posted on by admin

Two consortiums participating in an international tender offering 66 percent of DESFA, the natural gas grid operator, are expected to submit improved follow-up offers to TAIPED, the state privatization fund, by tomorrow. Processing work is expected to take a day or two before the follow-up offers are unsealed by Friday.

The additional round of offers is necessary as the initial bids made by the two teams, both over 400 million euros, were less than 15 percent apart. TAIPED, the state privatization fund, included a term requiring additional bids in such a case to generate the highest possible sale price.

Pundits believe the bidding teams have held back their firepower for the tender’s final round. This has raised hopes of a sale price close to 500 million euros, if not more.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to participate in the DESFA tender. All three hold key stakes in the TAP consortium. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Suma Chakrabarti, president of EBRD, recently met with Greek Prime Minister Alexis Tsipras, stressing his bank plans to invest between 400 and 600 million euros in Greece this year.

In a previous and unfinished sale attempt that also offered a 66 percent of DESFA, Azerbaijan’s Socar was declared the prefered bidder with a bid of 400 million euros. At the time, five years ago, when Greece’s country risk factor was higher, the operator’s 66 percent had been estimated to be worth 330 million euros.

DESFA’s current investment plan offers far more promise than it did five years earlier. Also, the operator’s current cash deposits, estimated at around 200 million euros, are considerably greater than they were during the previous sale effort.

 

 

Improved, follow-up DESFA sale bids expected by April 11

Posted on by admin

Two consortiums participating in an international tender offering 66 percent of DESFA, the natural gas grid operator, will need to submit improved follow-up offers to TAIPED, the state privatization fund, by April 11.

The additional round is necessary as the initial offers made by the two teams, both over 400 million euros, were less than 15 percent apart. TAIPED included a term requiring additional bids in such a case to generate the highest possible sale price.

Officials are confident that a sale price of close to 500 million euros, possibly more, can be achieved.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to participate in the DESFA tender. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

In a previous and unfinished sale attempt also offering 66 percent of DESFA, Azerbaijan’s Socar was declared the prefered bidder with a bid of 400 million euros. At the time, five years ago, when Greece’s country risk factor was higher, the operator’s 66 percent had been estimated to be worth 330 million euros.

DESFA’s current investment plan offers far more promise than it did five years earlier. Also, the operator’s current cash deposits, estimated at around 200 million euros, are considerably greater than they were during the previous sale effort.

Last week, RAE, the Regulatory Authority for Energy, set a weighted average cost of capital (WACC) level for IPTO, the power grid operator, at 7 percent for 2018, 6.9 percent for 2019, 6.5 percent for 2020 and 6.3 percent for 2021.

RAE’s WACC figures for IPTO are seen as a precursor for similar decisions concerning DESFA. These are expected within the current year.

DESFA bidders, both over €400m, holding back for finale

Posted on by admin

Offers made by two bidding teams to an international tender offering a 66 percent stake of DESFA, the natural gas grid operator, are both over 400 millon euros but less than 15 percent apart, meaning that an additional round of bidding will be needed.

This has boosted expectations among officials of a final result close to 500 million euros, well over the 400 million euros offered by Azerbaijan’s Socar in an unfinished previous sale effort, also offering a 66 percent stake of DESFA.

TAIPED, the state privatization fund, had set a term requiring follow-up binding bids if initial offers are less than 15 percent apart, the intention being to offer an incentive for higher bidding.

The two teams in contention are holding back for the decisive follow-up round, while the bidding could reach close to 500 million euros, or, ideally, even more, one pundit remarked.

One of the two bids is believed to be close to 450 million euros, while the other is over 400 million euros. It has not been specified which team is behind the higher bid.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to participate in the new DESFA tender. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Five years ago, during the first sale attempt, DESFA’s 66 percent had been valued at 330 million euros. At the time, Greece’s country risk was higher, while the operator’s investment plan was completely different to the current plan. Also, DESFA’s cash reserves are now much higher, close to 200 million euros. These two factors should push the sale price higher.

Meticulous processing by TAIPED of both bid portfolios delayed the opening of financial offers by over a month. Issues concerning the Spanish-Romanian-EBRD offer are believed to have added to this delay. The privatization fund needed to ensure that Spain’s Reganosa satisfied the tender’s terms, sources informed.

Snam, Enagás Internacional and Fluxys, the three members of one of the two participating consortiums, all hold stakes in the TAP consortium.

Suma Chakrabarti, the president of EBRD, which has joined the DESFA tender’s other bidding team, met with Greek Prime Minister Alexis Tsipras just days ago. The bank head stressed EBRD plans to invest between 400 and 600 million euros in Greece this year.

 

Meticulous processing delaying DESFA offer disclosures

Posted on by admin

TAIPED, the state privatization fund is paying particular attention to detail in its processing and inspection of bids submitted by two consortiums to an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, a key concern being the need to single out the lead players in each of these two consortiums and the terms they intend to set for their partners.

Though this meticulous inspection process has significantly delayed the disclosure of binding bids, submitted over a month ago, TAIPED is determined to avoid mistakes following an unsuccessful previous effort, not too long ago, to sell a 66 percent stake of DESFA.

The European Commission had expressed concerns that that sale effort’s preferred bidder, Azerbaijan’s Socar, would block rivals from operating in the Greek natural gas market. Brussels had also raised issues as to whether the tender’s outcome breached EU regulations.

The relaunched sale’s local authorities want to avoid any negative reaction from the European Directorate for Competition in this latest effort.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to submit a joint bid for the follow-up DESFA tender. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

The privatization fund has demanded various details from the participants over the past month or so.

The bids made by the two consortiums now appear likely to be opened next week, which would take the procedure deeper into the month. Recent reports had suggested the offers would be opened late this week.

For some time now, pundits have contended the new sale effort could generate offers in excess of 500 million euros, or 25 percent over the 400 million euros offered by Socar in the preceding unfinished attempt.

The natural gas market’s prospects in the wider southeast European region, as a result of new pipeline projects; steady yields promised by DESFA’s tariff level; and the operator’s strong cash reserves have been cited as three main reasons nurturing these high hopes.

 

 

 

DEFSA bids, submitted a month ago, to be opened next week

Posted on by admin

Following considerable delay prompted by an extensive check of bid details, TAIPED, the state privatization fund, is finally expected to open, late next week, two offers submitted to an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator.

The offers were submitted exactly one month ago, on February 16. As the disclosure date approaches, expectations are high for offers in excess of 500 million euros. Azerbaijan’s Socar had offered 400 million euros in a preceding and unfinished international tender that had also offered investors a 66 percent stake of DESFA.

Commenting on the issue yesterday, energy minister Giorgos Stathakis said the two offers would be “opened up in a week”.

In an effort to offer participants greater incentive for higher bids, TAIPED set a condition requiring an additional round of bids should the current offers, set to be disclosed, be less than 15 percent apart. If the difference between the two bids is greater than 15 percent, then the highest bidder will automatically be declared the preferred bidder.

Three factors have contributed to the upbeat expectations for elevated offers. One of these has to do with the natural gas market prospects in southeast Europe as a result of new pipeline projects and plans in the region. The steady returns promised by DESFA’s tariffs are a second reason. Thirdly, the operator’s substantial cash reserves are another attraction for investors.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys have joined forces as one of the two bidding teams. Their rival team is comprised of Spain’s Regasificadora del Noroeste (Reganosa Asset Investments), Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development.

Processing, content to delay opening of DESFA offers by about one week

Posted on by admin

Methodical processing and the amount of content in files containing documents and binding offers submitted to a tender last Friday by two bidding teams vying for a 66 percent stake of DESFA, the natural gas grid operator, has led to a delay in the opening of offers, previously anticipated for today, but now seen requiring several more days of processing, the objective being to ensure offers are complete.

Insiders informed energypress that the offers submitted to this crucial privatization may be opened towards the end of next week.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to submit a joint bid. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Pundits believe the offers could exceed 500 million euros, well over the 400 million-euro offer made by Azerbaijan’s Socar, the winning bidder of a previous sale effort that was never completed.

In an effort to intensify the rivalry between the two participants, TAIPED, the state privatization fund, has included a term in the tender that would require follow-up bids from both players if their current offers are not more than 15 percent apart. If this limit is exceeded, then the highest bidder will automatically be declared the prefered bidder.

Three factors are behind the optimistic outlook for higher offers in this latest DESFA tender. The natural gas market’s improved prospects in the wider southeast European region as a result of new gas field discoveries and subsequent pipeline plans; a DESFA tariff revision promising consistent returns; as well as the operator’s cash-filled coffer, are all seen driving bidders towards making higher offers.

 

DESFA offers still not opened as officials process documents

Posted on by admin

TAIPED, the state privatization fund, is expected to have gained a clear picture within the next few days on the level of completeness of offers submitted last Friday by two consortiums to a tender offering a 66 percent stake of DESFA, the natural gas grid operator.

Certain market officials believe that the privatization fund will open files containing the price levels of offers submitted this Friday, but pundits have informed energypress that this prospect is unlikely as authorities must first ensure that all other details, including required certification, are complete.

If additional documents are demanded from either of the two bidding teams, then the offers will not be opened any sooner than the end of next week.

Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys formed a consortium to submit a joint bid. Another Spanish entry, Regasificadora del Noroeste (Reganosa Asset Investments) joined forces with Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, for the other offer.

Both teams are seen as formidable participants determined to prevail in the DESFA tender, which has generated hopes among local authorities of strong offers.

Government officials believe a 400 million-euro offer made by Azerbaijan’s Socar, the winning bidder of a previous and unfinished tender that also offered 66 percent of DESFA, could be surpassed. In the lead-up to this latest sale effort, government sources have declared that not a single cent below 400 million euros will be accepted.

ELPE (Hellenic Petroleum), offering its 35 percent stake as part of the 66 percent total, has echoed these thoughts, noting that company shareholders will decide on whether to sell or not based on the price level offered.

 

 

Gasunie may exit DESFA team, gov’t wants at least €400m

Posted on by admin

Authorities closely following developments leading to today’s deadline for a tender offering 66 percent stake of DESFA, Greece’s natural gas grid operator, which expires at 5pm, believe the two bidding teams still in contention following an expression of interest in the previous round will both submit binding bids, minus a member from one of the two teams.

The Dutch operator Gasunie may withdraw from a four-member consortium led by Italy’s Snam and also comprised of Spain’s Enagas and Belgium’s Fluxys, energypress sources have informed.

Even if Gasunie joins its team’s anticipated DESFA offer today, the firm will eventually withdraw as its administration has reached a strategic decision to focus on other entrepreneurial fronts, the same sources noted.

Authorities explained that a withdrawal by Gasunie from the Snam-led consortium would neither have any legal repercussions on the Dutch operator nor any impact on the sale’s procedure.

The role of the European Bank for Reconstruction and Development (EBRD) in the tender’s other prospective bidding team, spearheaded by Spain’s Regasificadora del Noroeste (Reganosa) with Romania’s Transgaz as a partner, remains unclear.

It is rumored the EBRD intends to hold a minority stake. No announcements have been made. Market authorities contacted by energypress described the EBRD’s involvement as unusual given its institutional role.

Government officials, responding to energypress questions, said market conditions leading up to today’s deadline indicate that a higher price will be achieved, compared to a previous and unfinished DESFA tender, also offering a 66 percent stake. That attempt had attracted a 400 million-euro offer from its winning bidder, Azerbaijan’s Socar.

“Under no circumstances can we accept a single cent below 400 million euros,” one government official told energypress.

ELPE has maintained a similar view. The petroleum firm’s administration has repeatedly noted that the decision by shareholders on whether to sell ELPE’s 35 percent stake in DESFA or not will depend on the price offered.

The follow-up tender could produce offers of around 500 million euros, according to certain estimates.

Any hiccups in the latest DESFA tender would create serious issues for the government as this sale represents a key factor in the conclusion of the bailout’s third review, promising the release of a 5.7 billion-euro tranche. A Eurogroup meeting on the matter is scheduled for this coming Monday.

 

DESFA bidders set to make offers tomorrow; pundits spot differences

Posted on by admin

Two consortiums still in contention for a 66 percent stake of DESFA, Greece’s natural gas grid operator, now have just hours to go before submitting their binding offers to the sale’s tender, whose deadline expires tomorrow.

Any chance of a further deadline extension, requested by the sale’s participants as a result of certain concerns, has been ruled out.

There is no time for delays ahead of a crucial Eurogroup meeting this coming Monday. The DESFA sale is one of the pending issues that needs to display real progress if the bailout’s third review is to be concluded without alarm at the forthcoming meeting.

A team comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie represents one of the two bidding teams. Spain’s Regasificadora del Noroeste (Reganosa) has joined forces with Romania’s Transgaz, both backed by the European Bank for Reconstruction and Development (EBRD).

Pundits have avoided making any predictions on the price level of offers, a key selection criterion, but they have made a note of quality and financial stature differences between the two consortiums.

Market officials have highlighted that the consortium led by Snam is primarily industrial-based and comprised of Europe’s biggest natural gas companies, all of which possess significant experience in international projects, including TAP, the Trans Adriatic Pipeline now being developed.

In addition, Snam maintains a presence in the Italian, Austrian, UK and French markets, pundits noted. The Italian firm’s portfolio includes 40,000 kilometers of gas pipelines, two LNG terminals, as well as 19 billion cubic meters of natural gas in storage. Consortium partner Fluxys is active in Belgium, Switzerland, Germany and France, while fellow member Enagas, maintaining a presence in Spain, is also active in Latin America.

The rival bidding team’s Regasificadora del Noroeste (Reganosa) possesses two LNG terminals, one in Spain and the other in Malta, as well as 130 kilometers of gas pipelines in Spain. Its partner Transgaz is primarily active in international projects concerning Romania and regional markets.

Given DESFA’s aim to bolster its standing as part of a wider Greek strategy to establish the country as a natural gas regional hub, pundits have pointed out as crucial the need for the Greek operator to benefit as greatly as possible from the application of European practices and, especially, a further expansion of Greece’s natural gas infrastructure.

Besides quality-related factors, pundits have also distinguished financial differences between the two bidding teams. The Snam-led consortium’s financial structure appears to be more compact, while also possessing attributes promising stability, experts have stressed.

Snam’s current bourse value of approximately 13 billion euros, as well as revenues of 2.5 billion euros in 2016, cannot be overlooked. The bourse values of Fluxys and Enagas currently stand at roughly two billion and five billion euros, respectively.

Rival bidder Regasificadora del Noroeste (Reganosa), whose shares are not listed, posted a revenue figure of 58.5 million euros in 2016. The bourse value of bidding partner Transgaz is roughly one billion euros while its revenues for 2016 reached 363 million euros. Despite the smaller numbers, the EBRD’s participation does bolster this consortium’s financial standing.

The government is hoping the rivalry between the two consortiums will generate elevated bids. Azerbaijan’s Socar, the winning bidder of a previous and unfinished DESFA tender also offering a 66 percent stake, had submitted an offer worth 400 million euros.

 

 

 

 

DESFA sale’s deadline this Friday is final, bidders told

Posted on by admin

Though this coming Friday’s latest deadline for bindings bids in a tender offering a 66 percent stake of DESFA, the natural gas grid operator, is drawing near, reports of new obstacles and unresolved issues troubling the privatization attempt’s prospective bidders are abounding.

Despite the concerns, a new deadline extension beyond the February 16 date, following a previous stretch, will not be granted to the tender’s two remaining bidding teams, authorities have told energypress.

The DESFA privatization’s progress is crucial to the conclusion of the bailout’s third review, promising Greece a 5.7 billion-euro tranche. A new Eurogroup meeting concerning this review is scheduled to take place on February 19, just three days after the DESFA tender’s deadline.

A team comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie represents one of the two bidding teams. Spain’s Regasificadora del Noroeste has joined forces with Romania’s Transgaz as the other contender.

As has been previously reported, participants are demanding a revenue formula correlating investment performance with risk. Prospective bidders have also requested greater leniency for a time restriction limiting their right to resell any fraction of the 66 percent stake to be acquired in DESFA.

According to sources, an agreement has been reached that will permit buyers to resell their respective DESFA stakes once 24 months have elapsed, under the condition that their sale price does not exceed the amount to be established through the current tender.

The Greek government is aiming for a sale price of at least 400 million euros, the amount offered by Azerbaijan’s Socar, the winning bidder of a previous and unfinished DESFA tender in 2013, which had also offered a 66 percent stake of the operator.

 

Snam-led consortium set to make DESFA offer close to €400m

Posted on by admin

A Snam-led consortium established for a renewed tender offering 66 percent of DESFA, Greece’s natural gas grid operator, plans to submit an offer of around 400 million euros, reliable Italian media has reported.

Snam has been joined by Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, regarded, until recently, as the outright favorite for the tender, whose deadline for binding offers expires on February 16.

However, a recent decision by the sale’s other remaining contender, Spain’s Regasificadora del Noroeste, to team up with Romania’s Transgaz, has added new interest to the sale.

The Greek government hopes the run-off between two formidable contenders will generate elevated offers, a development that would validate its decision to restage the tender. Azerbaijan’s Socar was declared the winning bidder, amid feeble competition, of the previous DESFA sale effort, which eventually derailed. Socar offered 400 million euros for DESFA’s 66 percent.

Italian business publication Milano Finanza reported the Snam-led consortium will offer around 400 million euros.

The DESFA sale appears to be a leading priority for the Italian firm, which holds a 20 percent stake in the TAP consortium developing the TAP natural gas pipeline to cross northern Greece, Albania and the Adriatic Sea to Italy. The combination of both assets in the one portfolio is an attractive prospect.

This subject is reported to have dominated sideline talks between Snam’s CEO Marco Alvera and various officials at a recent Italian conference.

ELPE (Hellenic Petroleum) has agreed to include its 35 percent stake in DESFA to the sale. However, the petroleum firm’s participation cannot be guaranteed if the price offered is deemed to be unsatisfactory.

ELPE’s 35 percent and a 31 percent stake controlled by TAIPED, the state privatization fund, make up the 66 percent share of DESFA being sold.

ELPE’s deputy chief Andreas Siamisiis, in recent comments to Reuters, noted that the petroleum firm’s participation in the sale is not a given and will depend on the price offered.

 

 

Spain’s Reganosa, Romania’s Transgaz joining forces for DESFA tender

Posted on by admin

Spain’s Regasificadora del Noroeste (Reganosa), facing a powerhouse four-member consortium in its quest to acquire a 66 percent of Greek natural gas grid operator DEFSA through an ongoing international tender, appears set to officially join forces with Romania’s Transgaz in an effort to bolster its bidding hopes.

Regasificadora del Noroeste and Transgaz have signed a Memorandum of Cooperation, confirming a recent energypress report of a partnership in the making.

The tender’s other bidding team is comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, until now the hot favorite for DESFA’s 66 percent, being offered in a renewed tender following the collapse of a previous sale effort in which Azerbaijan’s Socar had been declared the winning bidder.

Transgaz is scheduled to decide on the details of its prospective partnership with Regasificadora del Noroeste for the DESFA tender at a shareholders’ meeting scheduled to take place on January 18.

According to highly-ranked Transgaz officials, the two companies have already agreed on the fundamentals of their cooperation and are currently examining the details of their prospective binding offer.

The Romanian officials also informed that Regasificadora del Noroeste will spearhead the two-member team as it meets all certification requirements listed in the DESFA tender.

The Transgaz officials have not ruled out the inclusion of other participants in the consortium. The Romanian firm expects the price for DESFA’s 66 percent to reach at least 400 million euros, a prospect that would satisfy the hopes of Greek government and operator officials.

Socar was declared the winning bidder of the previous DESFA tender, also offering 66 percent, with a 400 million-euro offer.

Transgaz is not a newcomer to the DESFA sale. The Romanian firm also emerged in the first round of the DESFA tender with France’s GRTGas, a member of the Engie group, as its partner. However, the pair failed to qualify for the procedure’s next round on the grounds that it may have not fulfilled EU conditions.

The tender’s deadline for binding offers has been extended by TAIPED, Greece’s stae privatization fund, to February 16, following a request by participants.

 

DESFA’s 66% to fetch over €400m, according to Italian media report

Posted on by admin

The sale price for a 66 percent of Greek natural gas grid operator DEFSA being offered through an international tender could exceed 400 million euros, the amount offered by Azerbaijan’s Socar in a previous unsuccessful sale attempt for an equivalent stake of the operator, Italian daily business newspaper Milano Finanza has reported.

Two participants remain in contention for the renewed DESFA tender. Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie have joined forces as a powerhouse team. Spain’s Regasificadora del Noroeste is the other participant.

The acquisition of DESFA’s 66 percent by the consortium Snam is member of would suit the Italian company’s investment strategy, according to Milano Finanza. The newspaper cited analyst double-digit yield forecasts for DESFA, as well as key projects now being developed, such as TAP, or planned for development, such as the IGI Poseidon, as favorable factors. The TAP and IGI Poseidon projects are pivotal for natural gas distribution in the Mediterreanan region.

Regasificadora del Noroeste is planning to establish a partnership with Romania’s Transgaz as part of effort to acquire 66 percent of the Greek gas grid operator. This development could further elevate the offers being prepared by the two prospective DESFA bidding teams.

Meanwhile, TAIPED, the state privatization fund, has accepted a deadline extension request made by the DESFA prospective, according to sources.

The deadline for binding offers has now been shifted to February 16 from December 22, the sources added.

Though the additional time granted to the tender’s participants for the preparation of their respective offers will probably tighten the sale’s schedule, the government hopes the heightened interest being expressed by participants, combined with DESFA’s robust financial standing at present and earnings potential for the future, will boost the operator’s sale price.

 

 

 

Clarity, better deal for buyers behind DESFA delay request

Posted on by admin

An extension request made earlier this week by prospective investors participating in a renewed bailout-required international tender offering a 66 percent stake of DEFSA, the natural gas grid operator, indicates the bidders are looking to clinch the most favorable deal possible through delay, greater investment analysis and increased pressure on Greece to sell from the lenders.

DESFA president Sotiris Nikas has already warned the tender’s lack of competition could affect the sale price achieved.

The sale has essentially turned into a one-horse race despite the remaining field of two bidders. Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, which joined forces as a powerhouse team for the DESFA tender, are one of two remaining participants. The other is Regasificadora del Noroeste, a Spanish entry bidding alone.

Italy’s Snam, part of the consortium already singled out as the odds-on favorite, is believed to be leading the pack as its most ruthless negotiator.

Even if the bidders are not granted a four-month extension but, instead, get just a few days beyond the current December 22 deadline for binding offers, they will have made an important gain. This seemingly trivial amount of extra time would give bidders a wider and clearer picture of DESFA’s standing in terms of the firm’s performance in 2017 as well as details concerning trading activity and upcoming order amounts. Gas supply deals are expected to be finalized around mid-January.

An extension would also offer bidders more clarity on DESFA’s overperformance and the collection process for a recoverable amount worth 320 million euros regarding sums from 2006 to 2015.

The operator’s consumption forecast of 3.5 billion cubic meters for 2017 has been revised to 5 billion cubic meters. This 1.5 billion cubic meter increase stands to generate bigger revenues for DESFA, and, based on sector rules, would normally prompt a tariff reduction for consumers. Instead, the extra revenues will go towards covering the recoverable amount, based on a decision made by RAE, the Regulatory Authority for Energy.

The DESFA bidders also anticipate a deadline extension would ultimately lead to greater pressure from the lenders on Greek officials, for the sale, and produce a more favorable deal for the buyers.

 

DESFA tender bidders request 4-month deadline extension

Posted on by admin

Prospective investors participating in a renewed tender offering a 66 percent stake of DEFSA, the natural gas grid operator, have called for a December 22 deadline set for binding offers to be extended by at least three to four months, the operator’s administration disclosed yesterday.

TAIPED, the state privatization fund organizing the tender, wants the procedure completed as soon as possible, and is pushing for the submission of binding bids within January, following the festive season.

It remains unclear how the country’s lenders would respond to any further delay of this sale, being staged for a second time following last December’s collapse of a long-running international tender. Azerbaijan’s Socar had been declared the winning bidder of the previous sale effort, also offering 66 percent of DESFA.

A deadline extension would jeopardize the influx of this sale’s privatization revenues within 2018, as anticipated in the national budget.

Until now, the DESFA sale has been regarded as the only energy-sector privatization that stands a realistic chance of generating privatization revenues in 2018.

Planned sales in 2018 of stakes at DEPA, the public gas corporation, PPC, the main power utility, and ELPE, Hellenic Petroleum, are widely seen as unrealistic, despite their inclusion in next year’s national budget.

DEFSA’s international tender participants apparently requested a deadline extension last week.

Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, which joined forces for the DESFA tender, are one of two remaining participants. The other is Regasificadora del Noroeste, a Spanish entry bidding alone.

 

 

Two of six DESFA bidders seen making tender’s shortlist

Posted on by admin

Two bidding formations from a starting field of six, one comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, and the other, Regasificadora del Noroeste, a Spanish entry bidding alone, are believed to have qualified for the second and final round of an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, energypress sources informed.

TAIPED, the state privatization fund, will soon announce the second round shortlist, possibly within the day.

Qatar’s Powerglobe LLC, American entry Integrated Utility Services (INTUS), French-Romanian team GRTgaz-Transgas, and Macquarie Infrastructure and Real Assets, an Australian contestant, have failed to make the shortlist, the sources noted. The French-Romanian and Australian entries did not meet operator certification requirements, an internationally renowned Brussels law firm helped determine, as the eligibility of both bidders was unclear.

Local authorities are concerned that the qualification of just two tender entrants may subdue second-round bidding and keep the sale price low. Some officials also fear the tender’s result could develop into a one-horse race for the Snam-Enagas-Fluxys-Gasunie team, as this formidable combination is expected to overpower the bidding ability of Regasificadora del Noroeste.

Azerbaijani firm Socar’s winning bid of 400 million euros for DESFA’s 66 percent in the preceding unfinished tender has served as an unofficial standard for this latest sale effort. Any sale price below this level would represent a failure, including for the government, whose moves helped bring down the previous DESFA tender.

Investors have demanded greater clarity over DEFSA’s long-term revenue capacity, including the method through which the operator will collect a “recoverable difference” of 320 million euros over the next 18 years. Investors are pushing for terms ensuring payment of a greater amount within the first ten years.

The payment’s distribution over the 18-year period dominated a meeting yesterday hosted by RAE, the Regulatory Authority for Energy. TAIPED, ELPE (Hellenic Petroleum) and DESFA officials took part. The meeting apparently led to more disagreements than agreements. According to sources, TAIPED’s representatives backed the investor request for payment of a greater “recoverable difference” amount earlier on.