Two Italian companies, SNAM and Italgas, are getting ready to battle it out for the privatization of DEPA Infrastructure amidst strong international interest for the tender deal.
The first phase of the privatization winds up today with the expiration of a deadline for those submitting initial interest in the Greek asset.
Indicative of the strong interest for a 100 percent stake in the gas distribution network is interest from the two Italian companies, both of whom share the same basic shareholder: Italian state lender Cassa Depositi e Prestiti (CDP). The lender owns 26.04 percent in Italgas and 31.04 percent in SNAM, while SNAM also has a 13.5 percent holding Italgas.
Assuming that this interest is confirmed today, it will be the first time that two companies from the same country, with the same basic shareholder, will rival against each other in a Greek privatization deal.
SNAM also leads a Senfluga joint venture (SNAM, Fluxys, Enagas) that has purchased 66 percent of Greek gas network operator DESFA. Italgas, on the other hand, has for some time now showed interest in entering the Greek market and has indicated its interest in buying a 49 percent stake in EDA THESS from Italy's Eni gas e luce (a subsidiary of ENI) but with no success.
Apart from the Italian companies, Greek authorities are expecting between 8 to 10 companies to show initial interest in DEPA Infrastructuree. Fluxys and Enagas are among those expected to put their hand up, along with US funds KKR and Blackrock and Australia's Macquarie. At the same time, there is talk that a Chinese fund may take part in the sales process, along with a peer from the Middle East. Talk of all these investors eyeing the sale is boosting expectations that the privatization will fetch a high price.
DESFA Infrastructure's five year 400 million euro investment plan is acting as a major drawcard, along with its multitude of subsidiaries in the distribution network that produce high returns. This is determined by Greek energy regulator RAE and has been set at 8 percent.
The winner of the tender will also automatically become the manager of the vast majority of Greece's low and medium pressure gas network, the one that supplies households and businesses. This is because DEPA Infrastructure owns 100 percent of Attika Natural Gas Distribution Company, 51 percent of EDA THESS and 100 percent of Public Gas Distribution Networks (DEDA), the company that manages the remainder of Greece's gas network.
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