Greek gas firm privatization fails amid bailout difficulties

ATHENS - Reuters

Russian energy giant Gazprom has pulled out of bidding for the privatization of Greek natural gas firm DEPA. Company photo

Greece failed to attract any buyers for its natural gas company DEPA by June 10’s deadline for binding bids, in a major setback to the country’s ambitious privatization program.

The failed sale overshadowed upbeat data showing Greece was on track to meet budget targets, just as inspectors from the EU and the IMF returned to Athens to monitor progress under the country’s latest bailout.

Failure to find a buyer for DEPA - which Athens hoped could fetch as much as 900 million euros - leaves the country unlikely to meet privatization goals this year, forcing the government to seek other savings to hit its bailout targets. It also threatens to undermine improved economic sentiment in Greece that has prompted the government to declare an economic recovery has taken root.

The European Commission would like Greece to have another go at selling the state-run gas firm DEPA as soon as possible after Athens failed, Commission spokesman Simon O’Connor said yesterday. The privatisation revenues are important for Greece to put its public finances back in order under the terms of an international bailout.

Gazprom worried about DEPA’s financial position

The sale floundered after Russia’s Gazprom, the frontrunner to buy DEPA, withdrew at the final stage of the sale before a deadline to submit binding bids expired. Gazprom said it was worried about DEPA’s financial position, but Greece said the Russian firm may have been discouraged by fears that the EU would impose stringent conditions.

“We haven’t received enough guarantees that DEPA’s finance position would not get worse after the deal is completed,” said Gazprom spokesman Sergei Kupriyanov. “The company is already experiencing difficulties with users’ unpaid bills.”

Athens, which has a binding goal to raise 1.8 billion euros from asset sales by the end of September, got just one bid - from Azerbaijan’s SOCAR - for natural gas grid operator DESFA, a DEPA unit that it wanted to sell separately. Greece said it would press ahead with the sale of DESFA despite the DEPA failure and may reconsider the timing for the privatization later this year of state oil refiner Hellenic Petroleum.