Deals

Snam-led consortium picks up 66% stake in Greece’s DESFA

The CDP-backed Italian gas utility – along with Belgium’s Fluxys and Spain’s Enagás – has emerged as the preferred bidder for a majority stake in the Greek transmission operator, agreeing to pay €535m.

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The Greek government’s second attempt at privatising its gas transmission operator has proved successful, with a consortium of European utilities emerging as preferred bidders for the 66 percent stake that was on offer.

Italian gas utility Snam, Belgian independent gas infrastructure group Fluxys and Spain’s gas transmission operator Enagás beat Spanish firm Regasificadora to acquire a 66 percent stake in the Hellenic Gas Transmission System Operator (DESFA), with a bid price of €535 million.

Snam, which is backed by Italian lender Cassa depositi e prestiti, is the consortium’s majority shareholder, owning 60 percent, while the remaining 40 percent is split equally between Fluxys, partially owned by Canadian pension fund CDPQ, and Enagás.

The three companies, which are also shareholders in the Trans Adriatic Pipeline project, will work towards further developing Greece’s gas infrastructure system, “fully realising the potential of Greece as a natural gas hub”, according to a joint statement.

“Furthermore, the consortium will be able to transfer technical and operational capabilities to DESFA and develop new uses and sources of natural gas (such as methane for transport and biomethane) to make a crucial contribution to the country’s emission-reduction process,” they said.

While it is unclear whether the Snam-led consortium was selected solely based on price, the winning bid is higher than the €400 million the Hellenic Republic Asset Development Fund, Greece’s privatisation agency, had agreed when it first tried to privatise the company in 2013. That deal, reached with Azerbaijan’s state gas operator, fell through when Socar asked Greece to reduce the price after the government raised tariffs by a lower rate than expected.

HRADF had not responded to a request for comment at the time of publication.

DESFA, which manages a high-pressure transport network of approximately 1,500 kilometres as well as a regasification terminal, is one of many state-owned assets the Greek government is required to privatise as part of the terms of its bail-out deals with the EU and the IMF.