BUSINESS

Privatization of gas firms set to fetch around 1 bln euros

By Vangelis Mandravelis

The privatization project concerning Greece’s Public Gas Corporation (DEPA) and DESFA, the country’s gas network operator, has drawn major interest and is likely to fetch around 1 billion euros, or even more, judging by the nonbinding offers submitted to the state privatizations fund (TAIPED).

If all goes well, TAIPED officials say, it is possible that the sell-off of the twin gas companies will bring in revenues that will cover a significant part of the target for privatization intakes in 2013, which is between 2.5 and 2.6 billion euros.

A picture is also starting to emerge regarding the interests of each bidder. Reliable sources say that Russia’s Gazprom and Greece’s M&M Gas Co (a joint venture owned by the Mytilineos and Motor Oil groups) are exclusively interested in DEPA, while Azeri state firm SOCAR and the consortium comprising PPF and GEK Terna is only interested in DESFA. Russian company Negusneft, meanwhile, is the only investor interested in both the 100 percent of DEPA and the 65 percent stake in DESFA that are up for grabs.

Fortunately for the fund and the government, four out of the five bidders are very comfortable in terms of finances, so securing a satisfactory price for the sell-offs should not prove too difficult.

All signs suggest that the choice of winning bidder will rest exclusively on the price offered. Market professionals admit that both the government and TAIPED are facing pressure from the European Commission regarding Gazprom’s participation in the tender. Brussels cites the issue of the European Union’s overdependence on Russian natural gas suppliers, but the Greek side has responded that this is not a priority for Athens. “It would be particularly difficult for anyone to be excluded from a tender of bids using criteria beyond the price offered,” say industry insiders.

TAIPED officials note that binding offers for DEPA and DESFA are scheduled to be submitted at the end of February, with the aim of sealing a deal with the selected investor by end-March. The signing of the agreement will come around June, provided the contract is approved by the Court of Auditors and ratified by Parliament.

Online