Vitol

DEPA Trade sale short list this month, sooner than expected

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Privatization fund TAIPED is expected to announce its short list of final-round qualifiers in a tender offering a stake of at least 65 percent, possibly even 100 percent, of DEPA Trade – a new entity formed by gas utility DEPA as part of its privatization – within the next few weeks, far sooner than expected.

Deteriorated international investment conditions have prompted fears of a slower sale procedure.

The privatization fund, now close to finalizing its appraisals of nine first-round bids, has requested clarification from participants.

The DEPA Trade privatization was expected to drag well behind that of DEPA Infrastructure, seen as a lower-risk sale effort offering investors regulated earnings, but the two privatization efforts now appear likely to move ahead almost concurrently, or a few weeks apart.

A list of six final-round qualifiers in the DEPA Infrastructure sale was announced a week ago. Authorities are aiming to complete this sale towards the end of the year.

As for DEPA Trade, this entity promises the winning bidder an immediate advantage in Greece’s natural gas market as more than 200,000 customers around the country will be gained.

DEPA Trade’s wholesale gas trading activity is another appealing factor, despite the fact that it shrunk to 40 percent of the market’s total last year, as the growing southeast European market offers huge potential.

DEPA Trade’s nine first-round bidders are: C.G GAS LIMITED; MET HOLDING AG; POWER GLOBE LLC; SHELL GAS B.V.; VITOL HOLDING B.V.; GEK TERNA; HELLENIC PETROLEUM (ELPE) & EDISON INTERNATIONAL HOLDING N.V. consortium; MOTOR OIL HELLAS & GREEK POWER UTILITY PPC (consortium); MYTILINEOS.

 

DEPA Trade offers due today, at least 7 players interested

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Five Greek and two international investment groups are expected to submit bids for the DEPA Trade privatization, whose first-round deadline expires today at 5pm.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

Bidders may also submit their expressions of interest online, via email, as a result of restrictive measures prompted by the coronavirus crisis, but will need to follow-up with official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

The local bidders expected to submits bids, all leading energy players, are Mytilineos, GEK Terna, Motor Oil, Hellenic Petroleum (ELPE) and the Copelouzos group.

ELPE plans to submit a joint bid in partnership with Edison, possibly through Elpedison, their joint venture for Greece’s retail energy market, sources informed.

The Copelouzos group is also working on delivering a joint offer, with Czech firm KKCG.

Shell is among the foreign companies looking interested, despite its sale, two years ago, of stakes in DEPA gas supply and distribution companies.

Dutch firm Vitol is the other foreign player believed to have been drawn to the DEPA Trade sale. Vitol had reached the final stage of an ELPE sale with Algeria’s Sonatrach as a bidding partner, but the pair ended up not submitting a binding offer.

Expressions of interest in DEPA Trade may also come from Swiss-based Hungarian firm Met Energy Holding, active in natural gas wholesale trade. This firm is already present in Hungary, Croatia, Italy, Serbia, Slovakia, Spain, Turkey and Ukraine. Qatar’s Power Global is another possibility.

DEPA Trade’s portfolio includes 409,000 customers – households and businesses.

 

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

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

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

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

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

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

 

ELPE privatization effort fails to deliver result, next step unclear

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

ELPE sale expectations, risks high as deadline day nears

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

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

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

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

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

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

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.

 

ELPE bidding deadline in sale offering 50.1% set for March 29

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Two bidding teams participating in a tender offering a 50.1 percent stake in ELPE (Hellenic Petroleum) have been set a March 29 deadline for binding bids, the state privatization fund TAIPED, staging the sale, has decided. All candidates have been informed.

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 for the ELPE tender.

Much work was needed to finalize this privatization’s sale and purchase (SPA) and shareholder (SHA) agreements.

Also, preceding ELPE sale deadlines needed to be stretched to allow the new entries, Carlyle and Sonatrach, to prepare, officials have noted.

ELPE’s bourse value at the end of yesterday’s trading session was 2.53 billion euros. The company’s share has gained 5.3 percent over the past month.

The European Commission, part of the troika, wants the ELPE privatization to be completed by the year’s half-way mark. In a recent report, Brussels expressed concern over the limited field of final-round qualifiers.

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.

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.

ELPE sale’s binding offers in late February, early March

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The binding bids deadline of a sale offering a controlling 50.1 percent stake in ELPE (Hellenic Petroleum) is expected to be set for late February or early March, sources closely monitoring the privatization’s developments have informed.

This one-and-a-half month period should provide enough time for the sale’s new entries, American firm Carlyle and Algeria’s Sonatrach – who have established respective partnerships with the procedure’s two existing candidates, Glencore and Vitol – to appraise ELPE.

No other pending issues remain other than a response from the prospective buyers on the privatization’s plan for ELPE Upstream. Holding Hellenic Petroleum’s hydrocarbon exploration and concession rights, ELPE Upstream will remain under the control of the state with a 51 percent stake.

The entire portfolio of ELPE’s current hydrocarbon exploration and concession rights has been incorporated into ELPE Upstream. Future concession rights are also planned to be added to this holding company.

The state will reserve the right to appoint ELPE Upstream’s managing director, while, according to sources, the holding company’s minority shareholder will have the right to decide on investment decisions and presumably exercise veto rights.

ELPE’s details were uploaded into a virtual data room last week for investors to study as they prepare to shape their offers.

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.

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.

Glencore joined by Carlyle, Vitol by Sonatrach in ELPE sale

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Two new participants, US firm Carlyle and Algeria’s Sonatrach, have entered the ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake by establishing respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol.

Though not yet officially announced, the Glencore-Carlyle and Vitol-Sonatrach pairings have apparently cemented, sources in contact with these players have told energypress.

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

Carlyle’s entry into the sale had been rumored prior to the procedure’s first round of non-binding bids, along with a list of other major players, including Italian petroleum firm Eni.

In a related development, the Greek State appears to have finalized a decision to participate with a 51 percent stake in a new hydrocarbon holding company referred to as ELPE Upstream. This means the winning bidding team of the ELPE sale will also acquire a 49 percent stake of the holding company. This, however, will depend on the approval of ELPE’s existing shareholders and, most crucially, prospective buyers.

All of ELPE’s exploration and production licenses have been transferred to this holding company as separate ventures. Though the Greek State will hold the right to appoint the holding company’s chief executive, the minority shareholder will decide on investment decisions through a veto right.

State control planned for ELPE hydrocarbon holding company

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

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

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

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

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

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

 

ELPE holding company state control thoughts new sale delay

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

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

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

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

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

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.

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.

 

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

 

ELPE union mobilizes to block Vitol inspection of refineries

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The ELPE (Hellenic Petroleum) union and its members have planned action for today and tomorrow with the aim of preventing representatives of Dutch enterprise Vitol, one of two prospective buyers through to the second round of an international tender offering a 50.1 percent stake of ELPE, from making on-site inspections of the Greek petroleum group’s facilities.

Vitol representatives are scheduled to visit ELPE’s refineries in Elefsina and Aspropyrgos, both west of Athens, today and tomorrow. However, this plan could be revised to avoid further delays to the sale procedure.

Visiting Vitol officials could be updated on the ELPE facilities at an alternative location, as was also the case a few weeks ago with representatives of Switzerland’s Glencore, the sale’s other candidate, who were barred entry into ELPE’s refineries by union members.

ELPE chairman Stathis Tsotsoros has described the union’s mobilization as an extremely serious matter. The government intends to take initiatives to ensure the completion of the site inspection stage of the sale process, he has noted.

Besides its blockades, the ELPE union has also taken action at a local and EU level claiming the sale breaches Greek and EU laws concerning acquisitions through public offers.

In an appeal forwarded to Greece’s Capital Market Commission, the ELPE union contends that the sale procedure launched by TAIPED, the state privatization fund, threatens to undermine the interests of the public sector, ELPE, the company’s shareholders, as well as ELPE workers.

Similar concerns, at an EU level, were expressed in the ELPE union’s appeal to European Parliament’s Committee on Petitions (PETI), responsible for the maintenance of EU law.

 

 

 

ELPE sale could be delayed by worker site inspection blocks

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A Hellenic Petroleum (ELPE) employees blockade yesterday that prevented visiting officials of Swiss firm Glencore from conducting on-site inspections at two ELPE refinieries west of Athens is likely to delay a privatization plan offering 50.1 percent of the petroleum firm.

Glencore is one of two qualifiers through to the second round of the Hellenic Petroleum (ELPE) international tender. Officials representing the other qualifier, Dutch enterprise Vitol, also plan to hold on-site inspections of the ELPE refineries, in Elefsina and Aspropyrgos, over the next few days, but the Greek petroleum company’s employees will presumably raise renewed resistance.

Privatization officals have yet to announce any alternate plans that could seek to counter the ELPE employee blockades.

The two qualifiers, already granted access to ELPE’s vrtual data room (VDR), also intend to inspect ELPE’s refinery in Thessaloniki.

Binding offers from Glencore and Vitol are expected around late September to early October, but delays could shift the deadline, still officially unannounced, to late in the year.

Despite the problems, the ELPE sale is making gradual progress. In a recent development, a total of eight evaluators, including banks and consultants, submitted offers to a tender offering an independent evaluation task for the sale. TAIPED, the state privatization fund, will declare a winner for the evaluation task within the first half of September.

Based on yesterday’s closing share price, 50.1 percent of ELPE is estimated at 1.1 billion euros.

The on-site refinery inspections by Glencore and Vitol representatives were planned as a follow-up to meetings in Athens in July, when ELPE’s financial figures were presented to the two candidates.

The intervention by ELPE employees is expected to delay the overall sale procedure by at least a month, some officials believe.

 

ELPE sale candidates preparing for on-site facility inspections

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Officials of Switzerland’s Glencore and Dutch enterprise Vitol, the two qualifiers for the second round of a Hellenic Petroleum (ELPE) international tender offering a 50.1 percent stake, are expected to make on-site inspections at three ELPE refineries – in Elefsina and Aspropyrgos, both west of Athens, and Thessaloniki – within the next few days.

The on-site inspections will follow a presentation of ELPE’s financial figures made to Glencore and Vitol representatives in Athens last month. The two candidates have already been provided access to ELPE’s virtual data room (VDR), containing data related to the Greek refinery.

Glencore and Vitol, both international oil trading giants, are already well familiar with ELPE’s facilities. They share an extensive trading past with ELPE as key suppliers, played crucial roles in the Greek crisis of 2012, and replaced Iranian crude imports once trade sanctions were imposed on Iran.

TAIPED, the state privatization fund, now needs to announce an independent evaluator, to be tasked with setting a nominal price tag on ELPE. The fund launched a tender for an evaluator on July 30. Interested firms faced an August 14 deadline. It remains unknown if bids were submitted, and, if so, how many. A remuneration limit of 190,000 euros has been set for the evaluation task.

Insiders support that all is progressing on schedule and binding offers by the two candidate buyers should be expected between late September and early October.

Both Glencore and Vitol own refineries and petroleum firms around the world and are believed to be capable of making offers in excess of one billion euros, the value of ELPE’s 50.1 percent, according to yesterday’s closing stock price.

Vitol sells 7 million barrels of crude per day and petroleum products to petroleum groups, multinationals, industrial enterprises, chemical industries as well as the world’s biggest airlines. Last year, the Dutch firm, founded in Rotterdam in 1966, supplied 349 million tons of crude and posted a turnover figure of 181 billion dollars. It maintains 40 offices in various parts of the world, the main branches being in Geneva, Houston, London and Singapore.

Switzerland’s Glencore, headquartered in Baar Zug, trades 6 million barrels of crude per day and refined products. Operating production facilities in Cameroon, the Republic of Chad and Guinea, Glencore also holds a 49 percent stake in the oil storage and logistics firm HG as well as a 10 percent stake in the Singapore-based refinery JAC.

 

 

ELPE sale entering advanced stage, fairness adviser sought

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

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

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

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

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

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

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

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

 

Evaluator for ELPE sale sought, binding offers by late October

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TAIPED, the state privatization fund, is preparing to hire an independent evaluator for the 50.1 percent sale of ELPE, a privatization whose second-round binding offers appear very likely to be submitted between late September and early October.

This sale represents one of the country’s most emblematic privatizations as ELPE is the biggest state-controlled energy company.

TAIPED announced a tender yesterday calling interested independent evaluators to submit their offers by an August 15 deadline.

The evaluator to be awarded the contract will have four weeks to put a price tag on PPC, which means the sale’s second-round qualifiers will face a deadline of no later than early October for binding offers, assuming no extensions are requested.

Switzerland’s Glencore and Dutch enterprise Vitol have qualified for the second round of ELPE’s international tender.

According to the privatization’s terms, the evaluator will either need to be an investment bank with a leading market position or a specialized consulting firm. The establishment of a consortium combining both will also be permitted, according to TAIPED’s terms.

The evaluator to be appointed will be given access to ELPE’s data room, which includes all technical and financial data necessary for the evaluation process. TAIPED will use the resulting evaluation as a measure of comparison for incoming offers.

Glencore and Vitol have already been given access to ELPE’s data room to decide on the levels of their binding offers.

Recent speculation pertaining to the emergence of a third candidate buyer, as a partner of one of the two qualifiers, appears to be groundless.

 

ELPE sale focus now on possible Vitol, Glencore partnerships

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Now that Switzerland’s Glencore and Dutch enterprise Vitol have officially qualified for the second round of an international tender offering a 50.1 percent stake of ELPE (Hellenic Petroleum), as was announced yesterday by TAIPED, the state privatization fund, interest in the privatization will turn to possible partnerships that may be established by the two qualifiers with other energy firms.

Pundits have already noted that partnerships by the two leading international traders with other major players could emerge by autumn, when the tender’s participating schemes will be expected to submit binding second-round offers.

Such a development would increase the chances of intensified bidding by the potential buyers and lead to higher prices, as was the case in the recent 66 percent sale of the DESFA gas grid operator, which required the Snam-Enagás-Fluxys team to make a 535 million-euro offer to secure a winning bid. Rival bidder Regasificadora del Noroeste (Reganosa Asset Investments) teamed up with Transgaz and the EBRD, the European Bank for Reconstruction and Development, to ignite the price lift.

The money involved in the ELPE sale is expected to be at least double this amount. According to yesterday’s bourse prices, ELPE is currently worth 2.1 billion euros, meaning a 50.1 percent stake could be estimated at 1.1 billion euros, not including the value of managerial rights attached to the majority stake.

Local price expectations for the ELPE sale are high but it remains to be seen if the two major traders will respond accordingly.

Glencore, one of the two ELPE sale qualifiers, is currently being investigated by the US Department of Justice over money laundering allegations as well as corrupt practices in Nigeria, the Democratic Republic of the Congo and Venezuela.

Local legal authorities have apparently assured TAIPED that the ongoing Glencore investigation in the US will not influence the firm’s role in the ELPE privatization. Even so, rival bidder Vitol could attempt to take advantage of the situation for a stronger position in the ELPE sale.

Glencore and Vitol were two of five first-round applicants in the ELPE privatization. A consortium comprising Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group, one of the three disqualified participants, has requested a re-examination of its dossier but TAIPED is not expected to change its decision. The consortium may resort to legal action at a national and European level, sources have noted.

Glencore, Vitol qualify for ELPE privatization’s second stage

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Switzerland’s Glencore and Dutch enterprise Vitol, two of five first-round applicants of an international tender offering a 50.1 percent stake of ELPE (Hellenic Petroleum), have qualified for the second round after meeting the privatization’s criteria, TAIPED, the state privatization fund, announced in a statement released today.

Following the signing of the relevant confidentiality agreement, the qualified investors will receive documents concerning the privatization’s second round and be granted access to the virtual data room (VDR), where data and information related to ELPE will be uploaded, TAIPED noted in the announcement.

A consortium comprising Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group, as well as Iraq’s Alrai Group Holdings Limited and the Gupta Family Group Alliance were disqualified for failing to meet all the criteria, TAIPED announced earlier this month. But an official list of second-round qualifiers remained pending until today’s announcement.

ELPE privatization applicant’s disqualification appeal rejected

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An appeal made by a consortium comprising Carbon Asset Management DWC-LLC and Qatar’s Alshaheen Group, requesting a re-examination of its unsuccessful dossier submitted to the first round of an ELPE (Hellenic Petroleum) privatization offering a 50.1 percent stake, is believed to have been rejected by TAIPED, the state privatization fund.

The consortium, one of three not shortlisted for the second round of the ELPE privatization, forwarded a letter to TAIPED last week demanding an explanation, by this week, for its first-round disqualification.

Though the privatization fund has taken the consortium’s appeal into consideration, it does not intend to revise the shortlist, sources have informed.

In the letter, the two-member consortium argues that it should have been informed of any missing details in its dossier and given an opportunity to submit these before being disqualified.

Just two of five first-round applicants, Switzerland’s Glencore and Dutch enterprise Vitol, are believed to have met all of TAIPED’s criteria for qualification into the second round.

It remains unknown if the Carbon Asset Management-Alshaheen consortium will pursue legal action, at a domestic or European level, once it is officially informed of TAIPED’s refusal to offer the investment team a second chance.

According to sources, the two-member consortium was engaged in advanced talks with Socar for the Azerbaijani firm’s addition to the scheme if it made the second round.

In a short announcement made on July 3, TAIPED stated that three of the five applicants schemes, Carbon Asset Management-Alshaheen, Iraq’s Alrai Group Holdings Limited, and the Gupta Family Group Alliance, were disqualified for failing to meet all the criteria.