Gazprom, Sintez and SOCAR said to be among bidders for Greece’s DEPA

Russia’s Gazprom and Sintez and Azerbaijan’s state-owned SOCAR are the main bidders for Greek gas company Depa, in a deal that could help the near-bankrupt country raise up to 1 billion euros, three people familiar with the situation said on Monday.

Greece hopes to sell all of the company – of which it holds 65 percent, with the remainder owned by Hellenic Petroleum – by the first quarter of next year, the people said.

Of the sales of state assets under way in Greece, Depa’s is one of the most advanced, alongside gambling company OPAP and prime real estate projects.

If completed early next year, the sales could put Athens back towards chipping away at a debt load expected to peak at 190 percent of gross domestic product in 2016 after it widely missed a 3 billion euro target this year. The government is now aiming to earn 300 million euros in 2012 and 11 billion euros by 2016.

Gazprom, Sintez and SOCAR emerged as the most dominant energy players in the tender, which has not attracted major Western European bidders.

Italy’s ENI, French EDF’s subsidiary Edison, and Spain’s Gas Natural and Enagas stayed away, most likely put off by Greece’s risky economic outlook, two of the people said.

The pursuit of Depa by Gazprom and Sintez also underscores the interest Russian energy companies have in finding ways to extend themselves into EU states, not least because of past rows with Ukraine, its major conduit to the EU.

However, a deal with Gazprom could face antitrust hurdles, since Brussels is already investigating the Russian company, which is 50 percent owned by the Kremlin, for alleged price fixing due to its dominant position as a gas supplier to Europe.

In general, a sale to a Russian company would run up against EU efforts to diversify gas supplies away from Russia by bankrolling new import corridors from the Caspian Sea via Azerbaijan and Turkey.

Europe’s so-called Third Energy Package restricts Gazprom’s control over its European pipeline assets.

Depa has gas trading activities, while its subsidiaries EPA supplies and distributes gas and DEFSA handles transmission.

The Greek gas company reported EBITDA – earnings before interest, taxes, amortisation and depreciation – of 60 million euros and EPA posted a combined EBITDA of 110 million euros in 2011, the people said.

Sector multiples for these assets would typically be around seven to eight times EBITDA, but the risk of a possible Greek default means the government would have to accept lower valuations of around five to six times, said two of the people, who are advising potential buyers on the deal.

DEFSA has a regulated asset base worth about 900 million euros but will also be sold at a discount due to the country’s risk, all the people said.

UBS is the Greek government’s lead adviser on the deal, alongside Rothschild and Greece’s Alpha Bank .


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