Move on sale of DEPA stake appears unlikely ahead of March election

Negotiations to sell 35 percent of Greek gas company DEPA to Spain’s Gas Natural will likely be delayed until after Greek elections in March, a DEPA source said yesterday. Gas Natural, the only suitor to present a binding bid for the stake in late September, has demanded written commitment from the State that the operating framework in the natural gas market, notably relating to pricing and supplies, will not change. «The government is only too happy to oblige and provide guarantees, but the opposition, which may or may not get elected, is so far saying it has other plans for DEPA,» the source said. The opposition conservatives have publicly disagreed with privatizing DEPA as a whole, and want to split it into two parts: a state-run arm dealing with infrastructure, and a trading firm that could be privatized later, within the context of the liberalization of the Greek gas market in 2006. «Obviously Gas Natural wants to wait and see; my guess is that the process will not go anywhere until after the elections,» the source added. Previous glitches in the deal included Gas Natural’s demand for guarantees that investment capital return should not fall below 7.5 percent, the source said. The source added that the term was later dropped as the State decided it could not follow it through in any way. The State currently owns 65 percent of DEPA, while oil refiner Hellenic Petroleum holds 35 percent. Power utility PPC has an option to buy 30 percent but the Finance Ministry has asked it not to exercise this until the sale has been completed.

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