Fundraising

Macquarie and First State firm bid for Greek gas stake

Six investors are vying for a majority holding in pipeline network operator DEFSA.

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Macquarie Infrastructure and Real Assets and a Spanish firm partly owned by First State are among six possible buyers for 66 percent of Greece’s Hellenic Gas Transmission System Operator (DESFA), which operates a 1,450km gas pipeline network.

MIRA and Regasificadora, a company in which First State bought a 15 percent stake seven years ago, are standing as sole bidders alongside UK-based Integrated Utility Services – a subsidiary of Berkshire Hathaway Energy – as well as newly formed Qatari firm Powerglobe.

Two consortiums have also been formed to bid for DEFSA: the first comprising Snam, Enagás Internacional, Fluxys and Nederlandse Gasunie; the second a joint venture between state-owned Romanian firm Transgaz and France’s GRTgaz.

Greek privatisation agency Hellenic Republic Asset Development Fund is set to examine the offers before deciding which firms qualify for the next phase of the tender.

The bidding process was launched in June as a reboot of a privatisation attempt that collapsed last November. State-owned Azeri firm Socar agreed a €400 million deal for the 66 percent still on offer in 2013, but the deal broke down after lengthy negotiations. 

The Greek government said this was due to Socar wanting to pay in instalments – a “legally impossible” scenario, it said. Although Socar blamed amendments made by the Greek government limiting its ability to take advantage of DEFSA’s profit potential. Socar had included Snam as a potential shareholder as part of its investment plan.

A spokeswoman for HRADF declined to comment on whether the fund would still be seeking €400 million. “The tender has just started, there is no evaluation yet, there will be a new one,” she added. “Things have changed since 2013, so there is no estimated amount. HRADF always seeks for the highest offer. That's the solid goal.”

The sale of the majority of DEFSA is just one of a string of complications to hit Greece’s privatisation programme recently. In May, HRADF rejected a bid to extend a PPP agreement for Athens International Airport, only to make a U-turn on the decision less than 24 hours later. In April, the agency knocked back bids for the Thessaloniki Port Authority and asked for improved offers. HRADF was also involved in a bitter public dispute with Russian Railways last year, which accused the agency of a lack of transparency surrounding the sale process of Greece’s TrainOSE.