Murky waters surround Scaramanga shipyard sale

While the new tender for the Scaramanga Shipyards enters the final stretch and the offers of interested investors are expected by July 7, the process remains unclear. Not only because it is not clear whether there will be interest from more than one investor, but also because delays in the Navy's large armament program for new frigates make it more difficult for investors to value the shipyards.

According to BusinessDaily sources, the tender is likely to receive a small extension, in order to coincide with another tender on the shipyard’s property run by the Public Real Estate Company (ETAD).

In any case, the two new tenders have been separated by law 4796/2021, which means in practice that the bidder of the special management tender will be able to operate a shipyard, without necessarily being required to bid in the ETAD tender as well.

This increases the chances of a successful deal but the big unanswered question is whether there will be enough investment interest to proceed with the sale. Market watchers tell BusinessDaily that, apart from the Priovolos group (Pyletech Shipyards), which has stated that it will submit an offer, 2-3 other groups have shown interest, one being from Greece. At present, however, none of these schemes have openly showed their interest in the shipyards.

Thus, even how the process will develop remains completely unclear: if there is only one valid offer, what happened in the previous tender should be repeated, ie it should be referred to the creditors' meeting (Ministry of Finance, Piraeus Bank, employees)  who will then decide if it can be accepted. If there are at least two valid bids, the procedure will automatically be judged in favor of the highest bid. It is recalled that in the previous tender, the offer of Onex was canceled as symbolic and, thus, only the offer from Priovoulos (15 million euros) was evaluated but deemed to be too low.

Sources watching the deal say that it would help a lot, if it was conducted with a clear message in terms of the Navy's armament program. The co-production of three of the four new frigates at Scaramanga Shipyards would be a valuable asset for the buyer and would completely change the assessment of its value. However, while there are a number of attractive proposals for the new frigate, their final evaluation is expected as of autumn, when the final proposal from the US side is submitted. Thus, those who are interested in the tender for the shipyards cannot be absolutely sure of the work they will undertake in the context of the supply of frigates.

Thus, the only player who is making his presence visible is the Priovolos group, which, however, strongly criticizes the special administrator, in a way that indicates that he does not intend to improve his offer.

The logic of the Priovolos proposal, as presented so far, is that it has a large investment plan, amounting to 700 million euros, and that this plan does not include a large expense for the initial acquisition of the shipyards. In this context, Pyletech last week accused the special administrator of leaving unpaid the costs of settling arbitrary settlements and issuing fire permits, which means that the buyer will incur an additional cost of 10 million euros.