Greek Desfa Privatisation: Two Finalists Selected

Greece has announced a significant step forward in its restructuring of the state-run national gas grid system Desfa, by selecting two finalists to go forward for final bidding.

Privatisation agency, the Hellenic Republic Asset Development Fund (HRADF) said that its board had decided September 22, in agreement with Hellenic Petroleum, that two investors are qualified to proceed to the next phase of a tender process for the acquisition of 66% of Desfa.

The 66% stake is made up of 31% held by HRADF (known also by its Greek acronymn Taiped) and 35% by Greek refiner Hellenic Petroleum.

The investors are:

• a consortium composed of four national gas grid operators, Snam (Italy), Enagas (Spain), Fluxys (Belgium) and Gasunie (Netherlands)
• Reganosa, the owner of the Ferrol LNG import terminal in northwest Spain.

HRADF said that the above pre-qualified investment schemes, following the signing of a non-disclosure agreement, will receive the documents describing the procedure for the next phase of the tender (the submission of binding offers) and will gain access to detailed information about the asset (virtual data room).

Six competing investors were last month reported to be in the running to compete for the 66% Desfa stake, including from Australia, North America, Qatar, and a consortium comprising French GRTgaz and Romania's Transgaz .

Gasunie is a Dutch state owned entity, while Fluxys is publicly controlled, and Snam and Enagas are listed companies in their respective countries. Each has interests in at least one LNG terminal (six in Spain alone in Enagas's case), just as Desfa owns and operates the Revithoussa terminal in Greece.

Lesser known Reganosa also has strong credentials too. Its own LNG import terminal in northwest Spain opened 2007 and this year it advised Malta on the launch of its smaller LNG import terminal and remains its operator. Reganosa is 50.69%-owned by Spanish industrial firm Grupo Tojeiro, 24.31% by the Galicia regional government in Spain, 15% by UK equity fund First State Investments and 10% by Algerian state LNG and gas producer Sonatrach.

Earlier privatisation attempt blocked by Brussels 

Athens in 2013 announced the sale of the 66% Desfa stake to Azerbaijan state-owned Socar for €400mn ($454mn), but the sale was later blocked on competition grounds by the European Commission unless Socar reduced its stake to 49%, and the sale fell through.

Socar later became a 33% equity owner of Malta's LNG import terminal and new power plant owner, Electrogas Malta. 

Mark Smedley

For more information and updates please refer to the Hellenic Republic Asset Development Fund's website (www.hradf.com).