SNAM’s wider ambitions raise consortium bid for DESFA to €535m

A consortium led by Italy’s Snam and including Spain’s Enagás Internacional and Belgium’s Fluxys, which, it has been revealed submitted a 535 million-euro second-round offer to an international tender offering 66 percent of DESFA, the natural gas grid operator, plans to invest in projects worth billions, if it is declared the sale’s prefered bidder.

These projects include links between DESFA’s natural gas network and that of Albania, whose development has already been awarded to Snam; the TAP pipeline running horizontally through Greece, Albania and across the Adriatic Sea to Italy, a project in which the Italian firm holds a 20 percent stake; as well as a prospective vertical axis to link the Bulgarian, Romanian, Serbian and Hungarian grids before reaching Austria’s Baumgarten gas hub.

The prospects offered by these projects spurred the Snam-led consortium to exceed by 30 to 35 million euros the value of DESFA’s 66 percent, estimated at roughly 500 million euros by two independent valuators commissioned by TAIPED, the state privatization fund, according to energypress sources.

As a result, the consortium comprised of Snam, Enagás and Fluxys appears likeliest to emerge victorious from the DESFA tender. A call by TAIPED for a further improvement to the second-round offers made cannot yet be ruled out.

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 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.

Last August, Snam and Albania’s Albgaz signed an MoU to begin developing Albania’s infrastructure. This agreement is directly related to the development of Albania’s natural gas market and the TAP pipeline crossing the country.

TAP represents part of the Southern Corridor, stretching from Azerbaijan’s Shah Deniz 2 gas field and running through Georgia, Turkey, Greece and Albania before ending in Italy via the Adriatic Sea.

“The Italian firm is determined to gain DESFA control. Besides being a TAP shareholder and having taken on development of Albania’s natural gas network, Snam is also aiming to develop the vertical corridor linking Bulgaria, Romania, Serbia and Hungary,” an official who is closely following developments told energypress.

Though still at the planning stage, the vertical corridor has been classified a Project of Common Interest (PCI) by the EU.

 

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

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

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

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

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

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

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.

Diplomats speak out on DESFA ahead of offer disclosures

The financial offers submitted slightly over a fortnight ago by participants in an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, could be opened by the end of this week, if the required legal and technical inspections of the sizeable dossiers accumulated by two bidding teams have been completed.

Diplomatic interventions, seeking to sway opinions, have surfaced as the disclosure of financial offers approaches.

Italian Ambassador to Greece Efisio Luigi Marras lent support to an offer submitted by a Snam-led consortium, also comprised of Spain’s Enagás Internacional and Belgium’s Fluxys.

“I understand that, especially amid the current economic conditions, price is important for these types of transactions, which is the right thing. However, looking ahead to the future, what counts most is the quality, reliability and strength of a partner chosen,” Marras told the Athens News Agency in an interview.

The US Ambassador to Greece, Geoffrey R. Pyatt, speaking to a group of energy sector authorities, noted that Snam, through its participation in the DESFA tender, is not only interested in the Greek market but the wider network of the western Balkans, all the way to Ukraine.

His comments were interepreted as an indirect form of support for the tender’s other bidding team made up of Spain’s Regasificadora del Noroeste (Reganosa Asset Investments), Romania’s Transgaz and the EBRD, the European Bank for Reconstruction and Development, whose participation could lead to US involvement.

Officials continue to believe that offers could reach, or even exceed, 500 million euros. Azerbaijan’s Socar, the winning bidder of a previous and unfinished attempt to sell a 66 percent of DESFA, had offered 400 million euros.

Follow-up offers could be requested if the initial are deemed to be unsatisfactory.

 

 

Snam plans to ‘establish Athens as base for southeast Mediterranean’

Snam will aim to contribute to Greece becoming a regional energy hub in the southeast Mediterranean, Federico Ermoli, chief international assets officer at Italy’s Snam, heading one of two bidding teams vying for a 66 percent stake in DESFA, the natural gas grid operator, has stressed in an interview with Greek daily Kathimerini.

Snam and its bidding partners, Spain’s Enagás Internacional and Belgium’s Fluxys, submitted a binding offer to the DEFSA tender last Friday. Staged by TAIPED, the state privatization fund, its content is still being processed before offers are opened, probably late next week.

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.

“We aspire to further develop the company and contribute to making Greece an energy hub in the Mediterranean for natural gas stemming from various regions,” Ermoli remarked, while adding that DESFA requires strong partners capable of making investments for the future of the firm, country and its geopolitical role.

Commenting on Greece’s strategic importance for Snam, Ermoli said the firm intends to establish an office base in Athens to manage its activities concerning interests in the southeast Meditteranean region.

“The region possesses many natural gas opportunities from the Caspian region, Russia, and possibly Israel, Cyprus and Lebanon,” Ermoli noted. “Italy and Greece have an important role to play in the establishment of an energy union and a strategic partnership for the Mediterranean.”

Snam holds a 20 percent stake in the regional TAP natural gas pipeline project now being developed. A segment runs across northern Greece.

 

 

 

 

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

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

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

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

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

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

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

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

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.

 

 

 

Sale agreement for DESFA’s 66% expected by early March

A finalized agreement to result from an ongoing international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, is expected between late February and early March, according to local daily Kathimerini.

If so, the agreement will then require authorization by Greek and European officials, a process expected to last anywhere between one and six months. Once this stage is completed, DESFA will need to be split from its parent company DEPA, the public gas corporation.

Given the requirements, the entire process could, realistically speaking, be completed withing the first quarter of 2018.

The Greek government aims to secure at least 400 million euros in privatization revenues from the DESFA sale. The operator is expected to post a profit of 90 million euros this year, a prospect that indicates it is in robust condition. DESFA’s current cash reserves total 170 million euros, which should help the sale effort.

Following a recent request, prospective bidders participating in the DESFA tender have been granted a one-month deadline extension for binding bids, now reset for January 22.

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

 

 

Clarity, better deal for buyers behind DESFA delay request

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

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.

 

 

Snam, DESFA weighing their regional pipeline options

Italy’s Snam and DESFA, Greece’s natural gas grid operator, are examining their options for transportation of gas from the Greek-Turkish border to Italy’s Salento peninsula in the southeast.

Currently staging a public consultation process to gather observations and proposals – it expires on December 18 – Snam and DESFA, brought closer by an ongoing international tender offering 66 percent of DESFA in which Snam is participating, are looking at developing a plan that would enable them to use both TAP and the IGI Poseidon so as to transport both Azerbaijani and Russian gas to Europe via Turkey, Greece and Italy.

The TAP pipeline, now under construction, is designed to transport gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing Greece, Albania and the Adriatic Sea, before coming ashore in Southern Italy. The IGI Poseidon, a plan by Gazprom, Edison and DEPA (Public Gas Corporation) is intended to transport natural gas from the Caspian and Russia towards Europe.

Snam and DESFA are also examining the construction of a new gas pipeline should the aforementioned combination not work.

This other gas pipeline would include include compressor stations in Evros and Komotini in Greece’s northeast, a 613-km submarine crossing from Greece to Italy, aand interconnection with the existing network on Italy’s mainland. The project’s budget has been estimated between 2.5 and 4 billion euros.

Snam is part of a consortium also including Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie that has submitted a bid for a 66 percent stake in DESFA, offered through a renewed tender.

Snam, which holds a 20 percent stake in the TAP (Trans Adriatic Pipeline), appears to be eyeing the wider region, not just the local market. The Italian company seems to believe in the promise offered by the southeast European market, until recently not a key part of plans set by major European corporations.

A recent article published by Italian newspaper Nuovo Quotidiano di Puglia explained that between three and four different pipelines could reach the Salento peninsula within the next two to three years and, from there, serve the entire continent. This is an important part of Snam’s planning.

The approval of an EU term permitting cross-boundary gas transportation has encouraged the Italian firm to further develop its plans.

Two of six DESFA bidders seen making tender’s shortlist

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.

 

 

DESFA tender bidders to be shortlisted next week

First-round bidders taking part in a renewed international tender offering 66 percent of DESFA, Greece’s natural gas grid operator, are expected to be shortlisted next week, once TAIPED, the state privatization fund, has received specialized advice from the procedure’s consultants.

Qualifiers will advance to the competition’s next round. A total of six teams submitted first-round bids early this month, including one comprised of Italy’s Snam, Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie, regarded as the favorite.

Snam, Enagas and Fluxys all hold stakes in the TAP consortium developing the TAP gas pipeline, to run across northern Greece, through Albania and the Adriatic Sea to Italy.

The emergence of this TAP-related entry for the DESFA sale certainly adds clout and bidding potential to the sale procedure.

France’s GRTgaz and Romania’s Transgas also joined forces as one of the other bidding teams. This formation should not be underestimated as GRTgaz stands one of the EU’s biggest energy sector firms operating the most extensive network of gas pipelines.

Questions regarding eligibility have emerged for members of three of the six bidding teams – Qatar’s Powerglobe, US firm Intergrated Utility Services, and Australia’s Macquarie Infrastructure.

A subsidiary of the Australian company maintains interests in an Italian network company. This could help Macquarie Infrastructure overcome EU-related restrictions.

The tender, according to its terms, is open to European operators as well as non-EU firms taking part as members of consortiums headed by European operators.

 

 

Major players meet DESFA sale’s first-round deadline

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

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

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

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

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

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

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

Snam jockeying for position on wider region’s energy map

Italy’s Snam, one of the prime candidates in Greek natural gas grid operator DESFA’s new tender offering a 66 percent stake, appears to be eyeing the wider region, not just the local market, as indicated by its signing of a Memoradum of Cooperation with Albania’s Albgaz.

Snam appears keen to establish itself as a key player in the emerging Albanian gas market through the development and utilization of networks to be supplied gas by the TAP pipeline.

The Italian company holds a 20 percent share in the TAP consortium developing the gas pipeline, to stretch through northern Greece and cross Albania all the way to Italy.

Snam has also signed a Memorandum of Understanding (MoU) with DESFA concerning the maintenance and operation of the TAP project’s Albanian segment.

In another initiative, Snam signed a cooperation memorandum with the EDA Thess gas supply company to support the latter’s development and operation of a natural gas network covering the wider Thessaloniki and Thessaly regions.

These moves suggest that the Italian company strongly believes in the potential of the southeast European gas market, until recently largely neglected by major European corporate groups. New markets are now being created while existing ones are being liberalized ahead of the prospect of new gas transmission plans from the east to Europe.

DESFA tender bidders face an August 7 first-round deadline for non-binding offers. The procedure’s deadline was offered a slight extension following the late emergence of an unidentified Greek-American investor.

Besides Snam, which could team up with a fund for the DESFA sale, Belgium’s Fluxys may join forces with Spain’s Enagas rather than Dutch gas company Gasunie, it was reported yesterday.

 

 

Fluxys team up with Enagas for DESFA tender possible

Belgium’s Fluxys may end up joining forces with Spain’s Enagas rather than Dutch gas company Gasunie, as has been previously reported, for Greece’s renewed tender offering a 66 percent stake of DESFA, the natural gas grid operator, latest speculation on the various possible collaborations, often conflicting, is suggesting.

Fluxys and Enagas have successfully teamed up in the past for a tender concerning the Swedish natural gas grid operator.

Sources have also not ruled out bids from two teams to include non-EU investors as bidding partners. This prospect remains unconfirmed.

Bidders face an August 7 first-round deadline for non-binding offers. It was slightly extended following the late emergence of an unidentified Greek-American investor. At this stage, interested parties are seeking to assess what impact this late Greek-American arrival may have on the tender.

The bidding is expected to be intense, as was recently noted by Marco Alvera, chief executive at Italy’s Snam, another candidate firm that could team up with a fund for the DESFA tender.

Greek government officials are confident that the new tender will generate a higher price than the 400 million euros offered for DESFA’s 66 percent in the previous and now-defunct initial tender by Azerbaijan’s Socar, that sale effort’s winning bidder.

Italy’s Banca Imi has evaluated DESFA’s 66 percent at approximately 494 million euros. If confirmed, this would satisfy the government.

The new DESFA sale attempt has developed into a challenge of political dimensions for the Syriza-led coalition, whose moves proved instrumental in killing the initial sale attempt, launched by the country’s previous administration.

Just days ago, prospective investors requested additional guarantees and clarity concerning the tender’s terms, presumably driven to do so by the eventual collapse of the previous tender. It ended after revenue-limiting measures imposed on Socar by Greece’s then-energy minister played a key part in the sale procedure’s derailment.

Prospective bidders are demanding steady tariff levels and a weighted average cost of capital (WACC) until 2022. The investors also want further clarity on the terms concerning a recoverable amount of 350 million euros to be demanded from DESFA through tariff charges over a 20-year period.

Bidders want greater clarity on DESFA future operating terms

Prospective investors looking to take part in Greece’s renewed tender offering a 66 percent stake of DESFA, the natural gas grid operator, have requested additional guarantees, presumably driven to do so by the eventual collapse of the previous tender for which Azerbaijan’s Socar had been declared the winning bidder before revenue-limiting measures imposed on the operator by the country’s then-energy minister played a key part in the sale procedure’s derailment.

Interested investors have requested additional guarantees so as to avoid any unpleasant legal framework surprises down the road such as those experienced by Socar when Panos Skourletis, the energy minister at the time, introduced measures limiting DESFA’s earning potential.

Guarantees demanded by the prospective bidders include an assurance that DESFA’s tariff levels and weighted average cost of capital (WACC) will remain unchanged until 2022. This demand clearly indicates the impact of the first DESFA tender’s developments on the follow-up sale attempt.

The investors also want further specification of terms concerning a recoverable amount of 350 million euros to be demanded from DESFA through tariff charges over a 20-year period. This demand is also linked to Socar’s bad experience.

Overall, potential investors are demanding absolute clarity on DESFA’s future operating conditions before any offers are made.

The new DESFA sale attempt has developed into a challenge of political dimensions for the Syriza-led coalition, whose moves proved instrumental in killing the initial sale attempt, launched by the country’s previous administration. The new tender will need to fetch more than the 400 million euros offered by Socar for DESFA’s 66 percent if it is to be branded a success.

The level of offers to be made by prospective investors will be determined by the level of clarity provided by Greek authorities on DESFA’s future operating terms.

Just days ago, a first-round deadline for non-binding offers was slightly extended to August 7 following the late emergence of an unidentified Greek-American investor who has expressed an interest in DESFA.

Belgium’s Fluxys and Dutch network operator Gasunie are expected to team up for a joint offer, while Italy’s Snam, possibly backed by a fund, is also regarded as a certainty. Spain’s Enagas also appears to be gearing up to join the list of interested parties.

 

Enagas displaying interest in renewed DESFA sale effort

Spain’s Enagas appears to be gearing up to join the list of investors exploring the possibility of acquiring a 66 stake in DESFA, Greece’s natural gas grid operator, judging by a letter forwarded by the Spanish company concerning the details of an August 7 deadline set for non-binding offers.

This deadline was slightly extended just days ago, following the late emergence of an unidentified Greek-American investor who has expressed an interest in DESFA.

Enagas president Antonio Llarden, during a recent teleconference with analysts, on the occasion of the presentation of DESFA’s first-quarter results, had noted that the Spanish company is closely following the sale effort concerning the Greek gas grid operator, adding that an official commitment could not be made at that specific point in time.

Enagas already maintains an indirect market presnence in Greece as a member of the TAP consortium, with a 16 percent stake, for the gas pipeline project now being constructed and to cross the country’s north.

Enagas had also expressed an interest in the previous DESFA tender, which eventually collapsed late last year. Azerbaijn’s Socar had been declared the winning bidder.

Besides the Spanish interest in the new DESFA sale attempt, pundits contend that two other investment teams will definitely submit bids. Belgium’s Fluxys and Dutch network operator Gasunie are expected to team up for a joint offer, while Italy’s Snam, possibly backed by a fund, is also regarded as a certainty.

Snam had also become involved in the initial unsuccessful DESFA tender, as Socar’s minority partner, with a 17 percent share.

 

 

DESFA deadline stretched by late Greek-American interest

The late emergence of an unidentified Greek-American investor who has expressed an interest in acquiring a 66 percent of DESFA, Greece’s natural gas grid operator, is believed to have convinced TAIPED, the state privatization fund, to offer an extension to the related tender’s deadline for non-binding offers, normally expiring today.

Sources noted that the Greek-American investor requested a deadline extension for the tender, essentially a relaunch following the collapse, late last year, of the country’s previous effort to sell an equivalent share of the operator.

TAIPED has set a new deadline for August 7, thereby granting the Greek-American investor some time to prepare a DESFA bid.

The extension offered is not connected to work being conducted by RAE, the Regulatory Authority for Energy, for new DESFA surcharges to apply over the next four-year period, as was previously believed, sources assured.

Pundits contend that two investment teams will definitely submit bids for DESFA’s 66 percent. Belgium’s Fluxys and Dutch network operator Gasunie are seen teaming up for a joint offer, while Italy’s Snam, possibly backed by a fund, is also regarded as a certainty.

Snam also became involved in the initial unsuccessful DESFA tender, as a minority 17 percent partner of Azerbaijan’s Socar, the sale effort’s winning bidder.

It remains unknown whether Spain’s Enagas will make an offer. The company’s leadership, on the occasion of the recent release of DESFA’s first quarter results, noted that Enagas is closely following the developments at DESFA.

Italy’s Banca Imi has estimated that DESFA is worth 900 million euros. Factoring in the Greek operator’s net debt level, a 66 percent share would be worth approximately 494 million euros. It is believed that bidders will exceed the 400 million-euro amount offered by Socar in the initial tender.

 

 

Two teams forming for DESFA tender, expected this week

Two camps appear to be forming as the main candidates in a new sale offering 66 percent of DESFA, Greece’s natural gas grid operator, whose tender could be announced this Thursday.

Italy’s Snam, emerging as the outright favorite, could bid alone or as part of a consortium with a non-operator co-investor such as the fund SFPI, which recently expressed an interest in DEFSA.

A consortium comprised of Dutch firm Gasunie, as the chief partner, and Belgium’s Fluxys, is expected to be the DESFA tender’s other prime candidate. Fluxys holds a 19 percent stake in the TAP (Trans Adriatic Pipeline) consortium, which could bring Spain’s Enagas, also a TAP shareholder, holding a 16 percent stake, into this bidding team. Marguerite, a European fund focused on infrastructure investments and comprised of capital from France, Italy, Spain, Germany, Poland and the European Investment Bank (EIB), could also join this second group.

France’s GRTgas, which has sought information on the new DESFA tender, could enter as a third bidder, but this would be considered a surprise development.

In the lead-up, the energy ministry yesterday tabled an amendment resolving pending DESFA-related legal issues. Previously, tender offers were limited to certified European operators. This could have prevented certain subsidiaries or SPVs that may be formed especially for the tender from submitting offers.

Bidders are expected to be given a period of at least 35 days to submit non-binding offers. Once the deadline has expired, certification held by participants will be examined. Bidders meeting the tender’s requirements will be invited to submit binding offers, possibly next autumn.

Though the Greek government will be hoping that the sale attracts bids of close to the 400 million-euro offer made by Socar – the winning bidder of the previous DESFA tender, which ended following interventions by the European Commission and Athens – an offer between 300 and 340 million euros appears to be a more realistic prospect for this renewed sale attempt.

TAIPED, the state privatization fund, maintains the right to request improved offers from participants  once binding bids have been submitted.

Given the current rate of developments, a preferred bidder could be named within the current year while a finalized agreement woud probably be signed in 2018.