European investors seen in pole position for DESFA stake

The executive board of Greece’s privatization agency, the Hellenic Republic Asset Development Fund (TAIPED), is set to approve a short list of candidates for the acquisition of a 66 percent stake in natural gas transmission system operator DESFA.

The six international consortiums that expressed an interest in DESFA earlier this month are: Macquarie Infrastructure and Real Assets (UK); a consortium of Italy’s Snam, Belgium’s Fluxys, Dutch-based Gasunie and Spain’s Enagas; Romanian state-owned Transgaz with France’s GRTgaz; Spain’s Regasificadora del Noroeste; Integrated Utility Services (USA); and PowerGlobe LLC (Qatar).

It is considered certain that at least three of the investors, those from Europe, will pass to the next round of the privatization process. Sources suggested that the chance of the other three consortiums also gaining approval is very slim due to a number of legal complications.

The favorite to win the tender appears to be the consortium involving Snam, Fluxys, Enagas and Gasunie. All four had shown interest in DESFA in the past and have now joined forces to enter the process. The first three companies are also shareholders in the Trans Adriatic Pipeline (TAP) and are interested in the geopolitical synergies that DESFA, especially its Revithoussa LNG terminal, offers.

The other European consortium, comprising Transgaz and GRTgaz, is also in a strong position. GRTgaz is considered a European leader in gas transmission and Transgaz is playing a key role in linking networks in Central and Southeastern Europe.

Regasificadora del Noroeste is an outsider but looks set to make it into the next round.

The other three investors that have expressed an interest, all from outside Europe, will be able to team up with any of the consortiums that do qualify for the next stage if they are excluded themselves.

Once the TAIPED board approves the short list, the investors will be obliged to sign a confidentiality agreement and go through due diligence, after which they will be able to make binding offers. A preferred bidder will then have be chosen within the next 12 weeks.