DEPA Infrastructure sale to be announced mid-December

Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

ELPE privatization headed for delay, lenders have approved

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

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

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

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

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

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

Concurrent DEPA infrastructure, trade unit sales being planned

Privatization fund TAIPED plans to stage concurrent tenders offering stakes of up to 65 percent in DEPA Trade and DEPA Infrastructure once legislation has been ratified to enable gas utility DEPA’s split into these two new corporate entities.

The Greek State holds a 65 percent stake in DEPA, while Hellenic Petroleum ELPE holds the other 35 percent.

The Greek State’s entire stake in DEPA – both infrastructure and trade – could be offered to investors, energy minister Costis Hatzidakis noted yesterday.

A DEPA draft bill enabling the sale of the Greek State’s entire share will be submitted to Greek Parliament within October, along with power utility PPC revisions and a wider framework for more extensive energy market liberalization, the minister added.

The level of the Greek State’s DEPA stake to be privatized will be determined once ELPE decides on the future of its 35 percent share in the gas utility.

It is believed ELPE could sell its stake in DEPA Infrastructure and seek control of the gas utility’s trading interests.

Ministry closing in on Kavala underground gas storage model

The energy ministry is close to deciding on a business model for a prospective underground gas storage facility in the offshore South Kavala region, the objective being to ensure the investment’s sustainability without overburdening consumers.

Numerous alternatives have been examined so far but a model applied in France and Italy appears to be the most favored, energypress sources informed.

The content of an upcoming joint ministerial decision is now at a mature stage following efforts that have now lasted nearly two years, energy ministry officials noted.

The ministerial decision will determine the licensing, development and exploitation terms for the project, 30km south of Kavala, where a depleted natural gas field is planned to be converted into an underground gas storage facility.

Swift progress is needed as Greece will need to request EU financing for the project, on the PCI list, in 2020. If the request is delayed until 2021 then the available funds could be severely diminished and absorbed by other European PCI-status projects.

The underground gas storage facility is vital for Greece’s electricity grid given the anticipated increase of gas consumption to be prompted by the planned development of combined cycle power plants. Five market players, Mytilineos, Elpedison, GEK TERNA, Elval Halkor and Karatzis, have expressed interest to develop such units.

Privatization fund TAIPED will take over proceedings for a tender once the project’s business model has been decided. The investment is expected to reach between 300 and 400 million euros. Its storage capacity is estimated at between 360 and 720 cubic meters.

Greece is the only EU member without an underground gas storage facility. All other member states maintain facilities covering at least 20 percent of their annual gas consumption needs. Many more similar facilities are currently being planned around Europe.

DEPA privatization bill later this month with majority stakes for trade, networks

Gas utility DEPA privatization plan revisions will be forwarded to parliament later this month, instead of within the first few days, as was previously believed.

The DEPA revisions will be included in a draft bill to also feature an order detaching power utility PPC from public sector terms concerning competitive procedures. This combined move has played a role in the slight delay.

The bulk of DEPA’s revised privatization plan is ready but certain legal details still need to be completed. Also, TAIPED, the privatization fund, and Hellenic Petroleum ELPE, holding a 35 percent stake in DEPA, need to be fully informed.

At this stage, it appears that majority stakes will be offered in DEPA’s trading and infrastructure interests, while the Greek State, now holding a 65 percent stake in the gas utility, will retain a majority stake in international projects.

This overall DEPA plan maintains energy ministry intentions unveiled in mid-September for the establishment of three divisions respectively representing trade, networks and international projects. It seems the government will probably sell the Greek State’s entire 65 percent stake concerning trade and networks.

Aggressive DEPA privatization in making, draft bill next month

Gas utility DEPA’s state-controlled era appears to be reaching its end as the energy ministry is looking to privatize the Greek State’s entire stake in the utility’s trading and infrastructure interests.

The Greek State – via privatization fund TAIPED – holds a 65 percent stake in DEPA, with Hellenic Petroleum ELPE owning the other 35 percent.

DEPA is at the forefront of the recently elected conservative New Democracy government’s privatization program, sources informed.

The Greek State’s interests in DEPA Trade and DEPA Infrastructure – the two new corporate entities formed through a DEPA spit plan engineered by the former Syriza government’s energy minister Giorgos Stathakis – will be completely withdrawn, the sources noted.

The former government was planning to offer a majority stake of DEPA Trade followed by a minority stake of DEPA Infrastructure.

Required legislation needed to proceed with the revised DEPA plan will be attached to a draft bill concerning changes at power utility PPC, expected in parliament early next month.

The DEPA legislative revisions will enable a complete transfer of the Greek State’s 65 percent stake in DEPA Trade to the privatization fund. Current law permits the transfer and sale of 50 percent plus one share.

The transfer to TAIPED of a 66 percent share of the Greek State’s stake in DEPA Infrastructure is also being planned, according to some sources, while others have not ruled out a full 100 percent transfer. The previous government had ratified law limiting DEPA Infrastructure’s privatization to less than 49 percent.

Sources have informed of yet another change in the making that entails the establishment of a new company and transfer, to it, of DEPA’s stakes in pipeline projects such as the IGB, Poseidon, East Med and IGI. Current law obligates such a company to remain a part of DEPA Infrastructure.

All these changes are expected to be finalized within the next few days.

Energy ministry pushing for swift completion of DEPA privatization

Swift completion of gas utility DEPA’s privatization procedure is a key objective for the energy ministry, whose choice of sale model will be strongly influenced by the time needed for implementation.

Opting to continue with the previous Syriza government’s unfinished DEPA sale procedure, instead of adopting a more recent New Democracy administration proposal that would entail the establishment of a holding company, appears to be the likeliest way to go, energy ministry sources have underlined.

Energy ministry and privatization fund TAIPED officials, along with legal consultant Potamitis Vekris and financial adviser UBS, held a meeting yesterday to discuss the DEPA privatization.

The previous government’s DEPA sale plan, involving a company split designed to offer investors separate stakes in two new entities, DEPA Trade and DEPA infrastructure, appears to be the favored option at this stage, with one big difference, this being to offer majority 65 percent stakes in each of the two new companies.

Under the Syriza version, investors would have been offered a majority 50.1 percent stake of DEPA Trade and 14 percent minority stake of DEPA infrastructure.

The government’s newer and less likely option, entailing the establishment of a holding company as a platform for two to three companies representing DEPA’s trading, network and international activity interests, has not been completely ruled out.

The recently elected government wants the DEPA privatization to be among its first sales. It intends to launch a tender in autumn for completion as soon as possible.

Slight delay, to early 2020, likely for Kavala gas storage tender

A tender for the utilization of a depleted natural gas field in the offshore South Kavala region as an underground gas storage facility appears headed for a slight delay and could be launched in early 2020, instead of late 2019, as a result of a deadline extension, from August 28 to September 9, granted to participants of a preceding tender looking to appoint a technical consultant for the project.

Besides the preliminary tender’s deadline extension, granted by the privatization fund TAIPED, a still-undelivered co-ministerial decision to determine the operating regulations of the storage facility is another matter that has increased the likelihood of a delay in the project’s competitive procedure. Even so, a launch by late 2019 has not been entirely ruled out.

The technical consultant will be tasked with preparing the tender’s details and offering TAIPED advice on the level of appropriateness of the plan to convert the depleted natural gas field into a gas storage facility, its equipment and interconnection needs, and other matters.

France’s Engie, Energean Oil & Gas and GEK-Terna have formed a consortium named Storengy in anticipation of the project’s tender.

 

DEPA leadership set for appointment, new privatization model near

The imminent appointment of Konstantinos Xifaras, a former managing director at gas grid operator DESFA, as chief executive of gas utility DEPA, and Giannis Papadopoulos, previously the managing director at venture capital firm Attica Ventures, as DEPA’s new company president, marks the first step towards a revision of the utility’s privatization plan, including related legislation.

Privatization fund TAIPED is expected to meet today or tomorrow to endorse DEPA’s new two-pronged leadership. An extraordinary shareholders’ meeting will immediately follow at DEPA for the duo’s approval.

The country’s previous Syriza administration had ratified legislation for a DEPA split plan entailing the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure. The plan was to sell a majority stake of DEPA Trade followed by a minority 14 percent stake in DEPA Infrastructure.

However, the recently elected conservative New Democracy government’s energy minister Costis Hatzidakis has implied a more aggressive DEPA sale plan will be adopted to offer investors majority stakes in both the utility’s trade and network divisions.

 

Upcoming endorsement of new DEPA leadership first of 3 steps

The privatization fund TAIPED’s anticipated approval, on August 30, of the new leadership at gas utility DEPA represents the first of three key step leading towards a new era for the company.

Earlier this month, Konstantinos Xifaras, a former managing director at gas grid operator DESFA, was named for the equivalent post at DEPA, while Giannis Papadopoulos, managing director at venture capital firm Attica Ventures, was announced as the gas utility’s new company president.

DEPA shareholders will immediately follow up with an extraordinary meeting to offer their approval of the company’s new two-pronged leadership.

Around the same time, a second key step is planned to be taken in the form of an amendment to be submitted to Parliament for a revision of the previous Syriza government’s DEPA split plan. It had envisioned the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure, as a prelude to the sale of a 50.1 percent stake in the former and a 14 percent stake in the latter.

The recently elected conservative New Democracy government appears determined to pursue a more aggressive DEPA sale policy that will offer majority stakes in both the utility’s trade and network interests. However, finalized decisions on a new company model, the third key step, have yet to be made.

Kavala underground gas storage tender later this year

A tender concerning the utilization of a depleted natural gas field in the offshore South Kavala region as an underground gas storage facility is expected to be launched by the privatization fund TAIPED towards the end of the year.

The privatization fund has informed the energy ministry on the progress of preparations, energypress sources informed.

A month ago, on July 12, TAIPED launched a tender seeking specialized preliminary services for the project.

The winning bidder of this initial procedure, expiring August 28, will need to prepare the technical details of the project’s eventual tender and offer consultancy to the privatization fund on the prospective underground gas storage facility’s feasibility and demands.

The recently appointed energy minister Costis Hatzidakis has made clear his intent to utilize the depleted natural gas field.

France’s Engie, GEK-Terna and Energean have formed a consortium, named Storengy, in anticipation of the project’s tender.

Greek gas grid operator DESFA is also believed to be eyeing the project, included in the EU’s list of PCI projects.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

The prospective underground gas storage facility is regarded as infrastructure that will complement – rather than compete against – the country’s existing LNG terminal on Revythoussa, an islet just off Athens, as well as a prospective FSRU in Alexandroupoli, northeastern Greece, helping establish Greece as an energy hub.

More aggressive DEPA privatization plan considered

The recently appointed energy ministry appears headed towards a more aggressive privatization policy on gas utility DEPA that could offer investors majority stakes in both its trading and network divisions.

All possible scenarios will be examined at a meeting today between energy minister Costis Hatzidakis and the leadership of privatization fund TAIPED in search of a new plan.

It would require a legislative amendment in place of a previous plan set forth by the minister’s predecessor Giorgos Stathakis prior to July’s election.

That plan entailed a split of DEPA’s infrastructure and trade divisions. Investors would have been offered a 50.1 percent majority stake in the commercial division and, at a latter stage, a minority 14 percent share in the infrastructure division. Such a plan has not been ruled out, but, if eventually picked, it would be revised.

The sale of a majority share in the networks, as is being considered by the new ministry, would offer managerial rights to investors in an effort to boost interest in the sale as well as the sale price.

Besides a revised DEPA split plan, Hatzidakis, the energy minister, is believed to be considering the establishment of a holding company that would house three subsidiaries representing the utility’s commercial, network and international project interests. Investors would be offered stakes in the commercial and network entities.

 

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

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

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

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

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

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

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

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

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

 

 

 

TAIPED awaiting ND position on ELPE, DEPA privatizations

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

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

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

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

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

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

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

 

 

 

 

 

PCI hopes for underground gas storage boosted by late effort

NEWS UPDATE: 

Greek energy ministry officials have made a successful last-ditch effort ahead of this Sunday’s elections that boosts the country’s chances of keeping on the EU’s PCI list an underground gas storage facility in the offshore South Kavala region, planned through the development of a depleted natural gas field, energypress sources have informed.

An FSRU in Alexandroupoli, northeastern Greece, will also be on the PCI list, enabling favorable funding terms, the sources added.

Prior to this latest development, energy ministry officials assured that problems concerning the South Kavala project’s place on the PCI list would be overcome, while admitting the project had been negatively appraised by Brussels.

Earlier today, energypress reported: 

A project entailing the development of a depleted natural gas field in northern Greece’s offshore South Kavala region as an underground gas storage facility appears likely to be removed from the European Union’s PCI list, a status enabling favorable funding.

Delays and the country’s early elections appear to have taken their toll and are believed to be key reasons behind the project’s likely removal from the PCI list.

The underground gas storage facility has been negatively reviewed by EU authorities amid procedures leading to the determination of a new and revised PCI catalogue for 2020-2021, energypress sources have informed.

Not all hope has been lost. Final decisions by EU authorities will be reached in October, which gives Greek officials some time to present their case in favor of the project’s PCI-list inclusion.

The asset’s ownership, along with the responsibility for its utilization, have been transferred to the privatization fund TAIPED, which has significantly delayed related initiatives as it obviously does not consider the project to be a top-priority issue.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

France’s Engie, as well as Terna and Energean, have formed a consortium to bid for the project whenever a tender is staged.

PPC rebound for €1bn EBITDA by 2022 possible, chief asserts

The worst is over for the power utility PPC as the corporation has the potential to rebound from disappointing financial results at present to an operating profit (EBITDA) of one billion euros three years from now, chief executive Manolis Panagiotakis supported in an interview with energypress.

The utility’s return to positive results could lure investors who would be willing to pay as much as 500 million euros for a 17 percent stake and become a strategic partner who would further reinforce the enterprise, Panagiotakis noted.

Such an amount could end up at state-controlled PPC rather than the TAIPED privatization fund if an equity capital increase is chosen over a direct sale of a 17 percent stake by the fund, Panagiotakis explained.

The PPC boss supports the entry of a strategic partner, as he has made clear in recent times.

The utility’s current administration should remain in place regardless of the results of the upcoming elections this Sunday, as is proper for any listed company. Panagiotakis stressed. The main opposition New Democracy is well ahead in polls.

 

Energy minister calls for DEPA administration change

Energy minister Giorgos Stathakis has called for all necessary measures to be taken for the immediate replacement of the administration at gas utility DEPA, a development prompted by the government’s decision to stage early elections on July 7.

The new DEPA administration will assume the task of maintaining smooth operations at the gas company for a brief period until the country’s next government appoints a new DEPA administration of its choice.

Stathakis made the call for a leadership change at DEPA in a letter to the privatization fund TAIPED and Hellenic Petroleum ELPE, holding a 35 percent stake in the gas utility.

In the letter, addressed to TAIPED’s Rihardos Labiris and ELPE chairman Stathis Tsotsoros, the energy minister calls for the immediate replacement of DEPA Chief executive Dimitris Tzortzis (photo), proposing Velissarios Dotsis, a former DEPA chief, as an interim boss.

Ministry, TAIPED to meet for ELPE, DEPA Trade sales

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

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

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

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

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

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

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

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

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

 

 

DEPA Trade tender launch likely within May, minister tells

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

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

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

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

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

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

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

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

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

 

 

 

 

ELPE, Edison talks for possible DEPA Trade joint bid at advanced stage

Hellenic Petroleum ELPE and Italian business partner Edison have reached an advanced stage in talks on whether to jointly bid for a majority stake of DEPA Trade, one of two new entities that emerged from a recent split at gas utility DEPA.

Edison’s existing association with ELPE through electricity retail firm Elpedison makes the Italian company a clear favorite for a role as the petroleum group’s bidding partner for DEPA Trade.

However, if the two sides end up not joining forces for the DEPA Trade tender, ELPE will need to decide on whether to pursue this sale alone or seek an alternative partner, sources at the petroleum group told energypress.

Many details still need to be resolved for the DEPA split. The privatization fund TAIPED has yet to set a launch date for the DEPA Trade tender. Officials at the fund believe the procedure can commence in Maym even if some of DEPA’s split details are not completed this month.

On the other hand, pundits believe investors cannot seriously consider the DEPA Trade tender if the details of what exactly is being sold remain unclear.

DEPA’s shareholders have requested assurances that a DEPA board decision for a transfer of approximately 70 million euros to DEPA Infrastructure, the company split’s other new entity – the Greek State will retain a majority stake in this venture – as a bonus, will not undermine DEPA Trade or force this venture to seek credit solutions. Shareholders may even seek expert advice on whether DEPA Trade could face sustainability issues. Hellenic Petroleum ELPE holds a 35 percent stake in DEPA. The Greek State maintains a controlling 65 percent share through the privatizations fund.

Given the shareholder uncertainties, the DEPA board has promised to offer substantiated backing for its wider plan with support from consulting firm PwC before May 31. A general shareholders’ meeting needs to be held by this date for the DEPA split plan to be completed.

 

 

Further details demanded for DEPA staff transfer plan

Gas utility DEPA’s shareholders – ELPE (Hellenic Petoleum), holding a 35 percent stake, and the privatization fund TAIPED – have requested further details and criteria, in writing, to be applied by the utility for its personnel transfers to DEPA Trade and DEPA Infrastructure, two new new entities resulting from the company’s split in the lead-up to its privatization.

The shareholders want to know how DEPA intends to fill personnel voids expected to be created by the transfers.

DEPA officials and their consulting team, whose ranks includes PWC, are working on finalizing a personnel transfer plan whose board approval will be sought over the next few days. The company’s intention is to have settled the issue by the end of this week.

DEPA has announced it plans to transfer 60 percent of its staff to DEPA Trade, whose majority stake will be placed for sale, and 40 percent to DEPA Infrastructure.

This distribution ratio takes into account staff on the payroll as well as subcontracted associates offered regular work until now.

Engie, Terna, Energean join for underground gas storage facility

Three major firms, each specializing in its own respective field, have formed a consortium to seek a contract to develop and operate a depleted natural gas field in northern’s Greece’s offshore South Kavala region as an underground gas storage facility, energypress sources have informed.

Storengy, belonging to France’s Engie group, Energean Oil & Gas, holder of a license for the South Kavala field, and technical firm Gek Terna are the three players joining forces for this contract, to be offered through a tender being prepared by the privatization fund TAIPED.

Greece remains the only country European country without an underground gas storage facility. All others maintain storage facilities covering over 20 percent of their annual natural gas consumption needs. At present, many countries in Europe are planning to develop additional such projects over the next five years.

Underground gas storage facilities play a key role in subduing carbon emissions as a result of the flexibility they offer to renewable energy sources.

Consortium member Storengy is Europe’s biggest developer and operator of underground gas storage facilities. It currently operates 21 such facilities of all types on the continent.

Offering a capacity of between 360 and 720 million cubic meters, or 10 percent of annual natural gas consumption in Greece, the South Kavala underground gas storage facility will require an investment of between 300 and 400 million euros to develop. The project has been granted PCI status by the European Commission, enabling EU funding support.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

ELPE privatization effort fails to deliver result, next step unclear

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

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

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

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

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

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

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

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

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

 

ELPE sale expectations, risks high as deadline day nears

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

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

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

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

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

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

ELPE bids deadline extended to April 3, union announces strike

The Greek privatization fund TAIPED has extended a binding-bids deadline for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) to April 3 from March 29, a  development that takes the sale procedure into the home stretch.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

The sale’s officials may call for a second round of improved binding bids if needed, sources informed.

Meanwhile, the ELPE workers union group PSEEP has reacted strongly against the planned privatization, describing it as a “major scandal” and “national crime”.  PSEEP has announced a three-day strike for March 28 to 30.

 

 

ELPE sale March 29 binding bids deadline set for mild extension

A March 29 binding-bids deadline set for participants of a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) will need to be extended by a few days as officials require more time to finalize details of the privatization’s sale and purchase (SPA) and shareholder (SHA) agreements, sources have informed.

The Greek privatization fund TAIPED, energy ministry and potential buyers are currently consulting on these details.

Energy minister Giorgos Stathakis has apparently raised certain objections and is awaiting responses from the privatization fund and investors, sources have informed.

Also, a US trip made last week by the energy minister to a major energy conference in Houston, Texas has contributed to the overall procedure’s delay, prompting the need for a binding-bids deadline extension.

Sources informed a few extra days beyond the March 29 date will be needed, while some believe the deadline could be stretched to around April 10.

Two bidding teams are participating in the ELPE tender. Glencore, an early qualifier, has been joined by US firm Carlyle, while Vitol, the other early contestant, has formed an alliance with Algeria’s Sonatrach.

 

Joint operation agreements for continued ELPE license efforts

All texts concerning the change of shareholder status at ELPE Upstream, a new ELPE (Hellenic Petroleum) subsidiary that has taken on all of the parent company’s hydrocarbon exploration and production rights ahead of the group’s nearing privatization, have been completed, according to the TAIPED privatization fund’s annual development plan.

ELPE will proceed with a capital increase to facilitate the transfer of a 50.1 percent stake of ELPE Upstream to the Greek State, leaving a 49.9 percent stake of the subsidiary for the corporate group.

Potential buyers are preparing to submit binding bids to a sale offering 50.1 percent of the ELPE group. A deadline has yet to be set but a date within the first ten days of March is possible.

Joint Operation Agreements have been prepared to ensure the continuation of activities at ELPE’s various licenses even if the prospective ELPE majority shareholder decides to pursue a different exploration and production strategy.

The Joint Operation Agreements will enable existing shareholders of ELPE’s SPVs to increase or decrease stakes. ELPE has established various SPVs with partners for licenses at the Gulf of Patras, the Ionian Sea, western Greece and Crete.

ELPE bidders given exemption right for ELPE Upstream costs

Potential buyers participating in a sale offering a controlling 50.1 percent stake in ELPE (Hellenic Petroleum) will be given the option of being exempted from hydrocarbon exploration-related expenses concerning ELPE Upstream, a separate division holding ELPE’s hydrocarbon exploration and concession rights.

A 51 percent stake of ELPE Upstream will remain under the control of the state. Potential buyers will have the right to refuse to partake in ELPE Upstream’s investment activities, given the minority stake they will hold in this venture.

This cost exemption option appears to have satisfied potential buyers of ELPE’s 50.1 percent, preparing to submit binding bids, possibly within the first ten days of March. A deadline has yet to be set.

Head representatives, including Sonatrach boss Abdelmoumene Ould Kaddou, have spent time in Athens over the past couple of weeks for meetings with Greek state privatization fund TAIPED officials. No objections appear to have been raised.

Sonatrach recently entered the ELPE sale, joining Vitol as a partner. American firm Carlyle, the other new entry, has joined forces with Glencore for this sale.

All of ELPE’s current exploration and production licenses have been transferred to ELPE Upstream.