Government to push part sale of ELPE, DEPA

The government appears consumed by the preparations for the Olympics, but there are issues affecting the economy that cannot wait. Among them are the part privatizations of the Public Gas Corporation (DEPA) and Hellenic Petroleum (ELPE). The present government may have declared that, contrary to its Socialist predecessor, its main goal in privatizing companies was not maximum revenue but a break from state tutelage; however, the pressure to fill state coffers does not leave much room for operating. In the case of DEPA, the government is continuing negotiations started by its predecessor with Spain’s Gas Natural, to sell a 35 percent stake in the company. ELPE also holds a 35 percent stake in DEPA. In the case of ELPE, a share-convertible bond maturing on July 28 is equivalent to an 8.2 percent stake in the company. The stake will revert to the Greek State, which will also have gained some 200 million euros from the sale of the bonds. Excluding this stake, the State owns 35.5 percent of ELPE and the Latsis Group, whose company, Petrola, was merged with ELPE, owns another 24 percent. The rest, just over 32 percent, is owned by retail and institutional investors, including social security funds. The government will wait for the proposals of banks, most likely UBS and National Bank, which will be hired as consultants, before deciding what to do with the extra ELPE stake in its hands. The options, according to Economy and Finance Ministry officials, are three: its sale to a big strategic investor, which could be the Latsis Group; sale to institutionals through the book-building method; and an offer to all investors through the stock market. Privatizations were just one of the subjects discussed at a meeting yesterday between Prime Minister Costas Karamanlis and Economy and Finance Minister Giorgos Alogoskoufis. The two agreed to submit to Parliament a law putting a cap on compound interest imposed by banks on defaulting borrowers by the end of the week.