DEPA memorandum signed

Spanish gas distributor Gas Natural (GN) yesterday signed a memorandum of understanding with the government to buy a 35 percent stake in the Public Gas Corporation (DEPA) for 285 million euros, the Development Ministry said. The basic terms of the memorandum are not binding on the two parties and have to be approved by the government to emerge from the March 7 elections. The main opposition New Democracy (ND) party has expressed disagreement with the particular privatization scheme since the tender was issued last year. In its recently unveiled economic program, ND said that DEPA’s basic infrastructure must remain under public monopoly control and that its commercial operations must be fully privatized. In fact, ND’s opposition on the scheme, promoted by the present government, was one of the basic reasons why an agreement has been considerably delayed, with the Spaniards demanding guarantees that the Greek State would not alter the sector’s legal framework. The memorandum envisages a definitive agreement by June 6, 2004 if the memorandum is approved by the next government. The State currently owns 65 percent of DEPA and 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 it until the sale to a strategic investor has been completed. The scheme would be the largest direct investment by a Spanish firm in Greece and GN’s biggest in Europe. The Madrid bourse-listed firm has a capitalization of 9 billion euros and experience in the development of gas markets in Spain and Latin America.