TAIPED

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

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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

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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

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

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

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

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

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

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

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

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

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

 

 

DEPA Trade tender launch likely within May, minister tells

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

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

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

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

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

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

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

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

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

 

 

 

 

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

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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

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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

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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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

ELPE privatization effort fails to deliver result, next step unclear

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

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

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

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

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

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

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

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

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

 

ELPE sale expectations, risks high as deadline day nears

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

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

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

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

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

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

ELPE bids deadline extended to April 3, union announces strike

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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

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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

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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

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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.

Privatization plan to offer 17% stake of PPC remains on hold

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Greece’s long-term plan to privatize 17 percent of the main power utility PPC appears to have been placed on hold and is likely to develop into an issue that will need to be dealt with by the country’s next administration following the national elections, due later this year.

The power utility’s ongoing effort to complete a bailout-required disinvestment of lignite units needs to be completed before any talk on the sale of PPC’s 17 percent can commence, the TAIPED privatization fund’s director Aris Xenofos told the Athens Energy Forum yesterday in response to a question on the matter.

Certain pundits believe maintaining PPC’s 17 percent on the country’s privatizations list serves as a form of pressure keeping the government committed to the current sale of PPC lignite units, including the Megalopoli and Meliti power stations.

Other pundits contend it is just a matter of time before the sale of PPC’s 17 percent stake is taken a step closer to execution by being transferred to the recently formed super privatization fund, of which TAIPED is a subsidiary. A 34 percent stake of PPC belonging to the Greek State has already been transferred to the super privatization fund.

The government has remained adamant on holding on to a 51 percent stake of PPC for the Greek State as a means of offsetting any negative reactions concerning its acceptance of the power utility’s bailout-linked disinvestment of lignite units.

Given the unclear picture of PPC’s future standing, it would most probably prove difficult to attract investors if the power utility’s 17 percent were to be placed for sale right now.

 

 

ELPE sale deadline headed for early-March extension

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The state privatization fund TAIPED appears likely to reset the binding bids deadline of a sale offering a 50.1 percent stake in ELPE (Hellenic Petroleum) for a date within the first week of March, more than one month beyond the current January 31 date, reliable sources have informed.

The need for additional time is being attributed to the recent entry into the sale of two new candidates, American firm Carlyle and Algeria’s Sonatrach. They have established respective partnerships with the procedure’s two existing candidates, Glencore and Vitol, and will need time to appraise ELPE before shaping bids with their partners.

TAIPED has yet to officially endorse the new bidding pairs but is expected to offer its approval very soon, possibly within the current week.

The ELPE sale procedure has needed to overcome various obstacles along the way. Late last year, Greece’s Capital Market Commission ruled that the preferred investor to emerge from the sale will not need to make a public offering to other company shareholders, ending an ambiguity that caused delays.

ELFE judicial administration, liquidation options considered

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The government is considering two insolvency procedures for debt-laden ELFE (Hellenic Fertilizers and Chemicals), one being judicial administration, the other compulsory liquidation, based on the country’s bankruptcy law.

Both options were mentioned in parliament just days ago by two leading government officials, Deputy Prime Minister Yannis Dragasakis and Minister of State Alekos Flambouraris, but neither of the two offered any further details.

ELFE’s debt of 120 million euros owed to gas utility DEPA is complicating the utility’s privatization plan being pursued by the government and TAIPED, the privatization fund.

If a judicial administration procedure is to be pursued, then one of the troubled company’s creditors will need to take legal action at a Court of First Instance in Kavala, northern Greece, where the firm is headquartered, and request that the producer be placed under judicial administration. DEPA will need to come into the picture here.

If a compulsory liquidation procedure is to be chosen, then an investor that may be interested in taking over the company will need to be found. In this case, ELFE’s creditors, which besides DEPA, include banks, PPC and others, will need to agree on a debt haircut.

Meanwhile, disclosures are abounding as to how Lavrentis Lavrentiadis, a failed businessman who acquired ELFE in 2009, manipulated a variety of associated firms that emerged from 2015 – and were tolerated by the government – to run down the fertilizer and chemicals producer and render it incapable of servicing its mountain of debt.

Details of legal action taken by Alpha Bank against ELFE in 2016 for a 15.1 million-euro loan extended in 2008, with the Greek State as the guarantor, were submitted to parliament for discussion last Friday by the main opposition New Democracy party. ELFE has failed to service this loan.

 

DESFA external workers to be hired ahead of ownership transfer

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A payroll inclusion demand by unions for external associates employed by gas grid operator DESFA and currently paid through sub-contract and freelance arrangements appears set to be accepted by authorities ahead of the operator’s transfer to its new owners, a consortium comprising Snam, Fluxys and Enagas.

DESFA has forwarded a request on the matter to RAE, the Regulatory Authority for Energy. Employees covering operator needs on a continual basis are expected to be added to the DESFA payroll.

It is believed RAE will approve the inclusion, on the DESFA payroll, of half the number of 350 external associates, in compliance with the new owners, while the payment terms of all these staff members will be reviewed.

A DESFA union and the Panhellenic Energy Organization (POE) have been applying pressure over the issue. POE staged a 24-hour strike yesterday.

Besides increasing DESFA’s operating costs, the transfer of external associates onto the company payroll will also require its owners to pay all newly added employees 14 monthly salaries per year, instead of 12, as is the case for all public sector firms following bailout revisions. DESFA’s transfer to its new owners will subject the operator to private-sector labor terms.

TAIPED privatization fund officials are rushing to complete the DESFA sale’s ownership transfer by the end of the year, which would inject 251.3 million euro’s into the Greek State’s coffers. Co-owner ELPE (Hellenic Petroleum) stands to receive 283.7 million euros. Snam, Fluxys and Enagas acquired a 66 percent stake of DESFA for 535 million euros.

Authorities have already endorsed the operator’s certification under its new owners, WACC figures, as well as a 10-year development plan.

The setting of DESFA’s new overall revenue requirement and approval of new board members remain pending but are expected to be settled within the next few days. The three-member consortium has forwarded the names of its board proposals.

Also, it is believed managers at the operator are currently being interviewed as part of DESFA’s personnel restructuring procedure.

 

Market analysts expect ELPE 50.1% sale to reach over €2bn

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Market analysts, including HSBC, in a new report, expect the ELPE group (Hellenic Petroleum) sale offering a 50.1 percent stake to exceed 2 billion euros.

Besides the privatization’s higher aspirations generated by ELPE’s strong profit figures, including a streak of records, international analysts are also pointing to excellent prospects for the petroleum group over the next two years, at least, as well as its limited exposure to mazut.

ELPE’s share ended trading last Friday at 7.57 euros but the petroleum group’s privatization may escalate its share price by 50 percent to 11.7 euros, according to the recent HSBC report, covering refineries in Europe, the Middle East and Africa (EMEA).

Given a share price of 11.7 euros, a 50.1 percent stake of ELPE would be worth 1.78 billion euros. Adding a 20 percent premium to this figure for the petroleum firm’s management rights also offered in the sale increases the value to 2.1 billion euros.

ELPE, it should also be noted, is one of the wider region’s few refineries which, with a minimal amount of facility adjustments, will be capable of producing new environmentally friendly shipping fuels by 2020. This prospect, promising even higher profit levels at ELPE in the near future, is seen adding to the petroleum group’s appeal among investors.

According to latest developments, buyers will be asked to submit binding offers within the first quarter of 2019.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to be discussing respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. No official announcements have been made on the rumored Glencore-Carlyle and Vitol-Sonatrach pairings.

TAIPED, the privatization fund, has yet to set a deadline for new partnerships.

Energy authority’s DESFA certification paves way for sale’s completion

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RAE, the Regulatory Authority for Energy, has delivered its pending certification needed for the completion of a gas grid operator DESFA sale, giving Snam, Fluxys and Enagas, the winning bidding team, a 66 percent stake, sources have informed.

This move sets the stage for the transfer of DESFA’s 66 percent to the buying trio. RAE also approved the gas grid operator’s WACC figures at a board meeting yesterday.

Snam, Fluxys and Enagas, as well as their respective Italian, Belgian and Spanish embassies in Greece, had raised concerns over delays holding back the sale procedure’s final stage.

State privatization fund TAIPED is eager to complete the transaction, which will inject 251.3 million euros of the sale’s total amount of 535 million euros into its coffers. Hellenic Petroleum (ELPE), DESFA’s other shareholder, stands to receive 283.7 million euros.

TAIPED’s leadership regards the DESFA privatization as a success. A preceding sale effort, staged four years earlier, was cancelled to make way for a new attempt that ended up generating a higher sale price.

RAE has yet to endorse DESFA’s 10-year national gas grid development plan, submitted approximately a year and a half ago.

The privatization fund is now awaiting the energy ministry’s submission to parliament of a draft bill needed for gas utility DEPA’s split into two companies, DEPA Trade and DEPA Infrastructure, ahead of its privatization. The energy ministry plans to submit this bill in January.

Early elections not a threat for ELPE sale, officials assure

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Greek privatization procedures already at a mature stage and not requiring any legislative revisions or presidential decrees, such as the ongoing ELPE (Hellenic Petroleum) sale, would not be affected by early elections ahead of the completion of the government’s four-year mandate in October 2019, even if these were to be held as early as March, prospective buyers in the ELPE sale, offering a 50.1 percent stake, have been assured by the privatization fund TAIPED in response to questions on the matter.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to have established respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. However, to date, no official announcements have been made on the Glencore-Carlyle and Vitol-Sonatrach pairings.

If verified, the ELPE sale’s new entries can be expected to raise hopes for higher offers when binding bids are submitted at a still-unspecified date within January.

ELPE contenders to be given one final binding bids deadline extension

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Vitol and Glencore, the two contenders of an ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake, will be granted a final deadline extension for binding bids, which will shift the submission date to some time in December, possibly early January, the chief official of TAIPED, the state privatization fund, has told local radio.

Vitol, Glencore and the privatization fund have found themselves needing more time despite a decision reached yesterday by the local Capital Market Commission that resolves an ambiguity as to whether the preferred investor to emerge from the sale will need to make a public offering to other company shareholders. The commission decided such follow-up action by the winning bidder will not be necessary, sources informed.

The bidders need more time to prepare their respective offers, while TAIPED and its consulting team are still fine-tuning binding offer terms.

There has been some speculation that the privatization fund could set a December 15 deadline but TAIPED is more likely to set a January date.

ELPE bids by end of November, public offering presumed

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TAIPED, the state privatization fund, appears headed towards setting a late-November date for binding bids by prospective buyers in the ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake.

The privatization fund, keen to push ahead the ELPE sale process, which has lost some pace, is acting on the presumption that the winning bidder of PPC’s 50.1 percent will need to follow up with a public offering to the remainder of the company’s shareholders.

If so, either Glencore or Vitol – the sale’s two contenders – will need to buy, at the same price, shares offered by other company shareholders, meaning the buyer could end up with as much as a 70 percent stake of ELPE. Greek and foreign institutional investors, as well as small-scale shareholders, hold a 19 percent stake of ELPE.

The local Capital Market Commission has yet to deliver a decision on whether a public offering procedure will be needed.

Commenting yesterday on the need for swifter progress in the sale’s overall proceedings, energy minister Giorgos Stathakis stated the ELPE sale’s bidding procedure would be completed by the festive season.

At this stage, a proposal entailing a legislative revision by the finance ministry that would exempt ELPE from public offering procedures does not appear to have gained any ground.

At the current rate, given the Capital Market Commission’s delays, the sale is not expected to be completed before the summer or autumn of 2019.

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

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

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

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

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

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

 

Ministry proposes law revision for ELPE sale’s public offering dispute

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Greece’s finance ministry has proposed a legislative revision as a solution exempting the ELPE (Hellenic Petroleum) privatization from law concerning public offering procedures.

The Capital Market Commission, locked in a dispute with the ministry and TAIPED, the state privatization fund, has insisted that the ELPE privatization cannot be exempted from public offering procedures as, besides the Greek State, selling 20.5 of its 35.5 percent stake, the sale also involves a private-sector company, Paneuropean, ELPE’s main shareholder, which owns 45.47 percent and is selling a 30.47 percent stake. Subsequently, the sale cannot be regarded as one of exclusive interest to the public sector, the Capital Market Commission has contended.

Insiders believe the finance ministry’s revision proposal will not be easy to achieve as the law concerning public offers is clear.

The dispute has prompted a deadline delay for binding bids, now expected to be extended until no sooner than December.

Dutch enterprise Vitol and Switzerland’s Glencore are the two contenders in an international tender offering 51 percent of ELPE.

 

ELPE privatization’s public offering decision needed within ten days

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The next ten-day period will be of crucial importance for the ELPE (Hellenic Petroleum) privatization and a request made by Greece’s Capital Market Commission calling for the eventual buyer of a 50.1 percent stake of ELPE – being offered through an international tender now down to two contenders, Dutch enterprise Vitol and Switzerland’s Glencore – to buy shares offered by smaller shareholder groups at the same price, through a public offering procedure.

Disagreements between authorities will need to be resolved no later than October 20, otherwise TAIPED, the state privatization fund, will need to delay the binding bids deadline faced by the prospective buyers until November, possibly later.

The Capital Market Commission appears has insisted that this privatization cannot be exempted from public offering procedures as, besides the Greek State, selling 20.5 of its 35.5 percent stake, the sale also involves a private-sector company, Paneuropean, ELPE’s main shareholder, which owns 45.47 percent and is selling a 30.47 percent stake. Subsequently, the sale cannot be regarded as one of exclusive interest to the public sector, the Capital Market Commission contends.

TAIPED disagrees with this stance and has referred to reports of independent law firms claiming there is no public offer issue.

If the Capital Market Commission’s position prevails, then the ELPE privatization’s winning bidder – either Vitol or Glencore – will need to need to buy shares offered by other shareholders at the same price. The ELPE stake to be acquired by the eventual buyer could reach as much as 70 percent, as institutional and small-scale investors, Greek and foreign, currently hold a 19 percent stake in the petroleum firm.

 

TAIPED to delay DEPA, ELPE privatization schedules

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TAIPED, the state privatization fund, is preparing to extend its completion deadline for a 50.1 sale of Hellenic Petroleum (ELPE) and also delay the launch of gas utility DEPA’s privatization.

An October deadline faced by Glencore and Vitol, ELPE’s two prospective buyers, for binding bids now appears set to be shifted to November.

The privatization fund is waiting for the Hellenic Capital Market Commission to adopt an official position as to whether a public proposal by listed ELPE to other shareholders is necessary, sources have informed. TAIPED’s administration insists related law clearly states that such a procedure is not needed.

This issue appears to be the final obstacle for the ELPE sale’s completion. Previous problems, such as union resistance blocking investors from visiting the petroleum firm’s facilities west of Athens, in Aspropyrgos and Elefsina, have been overcome.

The launch of DEPA’s privatization now seems set to be moved from November to the first quarter of 2019.

A decision by the local competition committee to further investigate an agreement between DEPA and Shell for the former’s acquisition of the Dutch firm’s 49 percent stake in their EPA Attiki supply venture covering the wider Athens area is one factor delaying the launch. DEPA stands to gain full ownership of EPA Attiki if the deal is completed.

Various scenarios concerning DEPA’s split into separate enterprises carrying its trade and infrastructure interests have also played a role in the delayed launch of the gas utility’s sale. A related draft bill is expected to be submitted to parliament in November or December.