Gas Natural seeks assurances on DEPA decisions, regulations

MADRID (Reuters) – The chief executive of Spanish gas distributor Gas Natural told Reuters yesterday the company was seeking assurances from the Greek State and fellow shareholders before agreeing to buy a 35 percent stake in Greek gas company DEPA. The assurances would include a management pact with fellow shareholders and an investment protection agreement against regulatory changes from the Greek State, Chief Executive Enrique Locutura told Reuters in an interview. «We are in discussions with the Greek government regarding the safeguarding clauses. Depending on how positive the talks turn out to be, these clauses will determine whether there is a deal or not,» Locutura said. Gas Natural was the only suitor to present a binding offer for the DEPA stake. Sources close to the deal said Gas Natural’s bid came in lower than the 300 million that the Greek State had penciled in its privatization plans this year. «We are the only company that is being considered at this time by the Greek government. We have presented an offer that we naturally want to protect insofar as there is not yet a regulatory system in Greece that has gone through official channels within the administration,» Locutura said. Without entering into great detail, Locutura said Gas Natural would require that board decisions be made by consensus because no single investor would have control. Gas Natural would have voting rights equal to the 35 percent stake it would acquire. «Nonetheless, there is a series of decisions that require qualified majorities. .. and these would guarantee us that a decision would not be taken against our wishes,» he said. The Greek State controls 65 percent of DEPA and oil refiner Hellenic Petrol has the other 35 percent. Power utility PPC has an option to buy 30 percent, but the Finance Ministry has asked it not to exercise it until the stake sale has been completed. Earlier yesterday, Gas Natural operating profit (EBIT) fell 21 percent to 596.1 million euros, and earnings before interest, tax, depreciation and amortization (EBITDA) fell 19 percent to 896.7 million euros. Revenues rose 4.9 percent to 4.14 billion euros. «I think that, looking at next year, we can talk about expected growth above double digits,» Locutura said. Gas Natural held all of Enagas last year but only 41 percent in 2003 after listing most of it on the stock market. Gas Natural must cut its stake even further under government liberalization rules. On a like-for-like basis, net income rose 13 percent and EBITDA 11 percent, the company said. Sales volumes in Latin America rose 6.9 percent to 63,223 gigawatt hours (GWh), leading to 35 percent growth in EBITDA in Latin America on a like-for-like basis. Gas Natural does business in Argentina, Brazil, Colombia and Mexico.