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A crucial week for privatisation

22 June 2013 / 16:06:50  GRReporter
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Next week is expected to be crucial for the privatisation of the national operator of the transmission network and the State lottery OPAP, for which the signing of the contract by the winning holding has been expected since last November. In terms of the privatisation of the State Natural Gas Company, the number of problems has also increased for the ferry company Anneke after Russia's Gazprom announced that it will participate in a new tender for the sale of the company.

As for the national gas transmission network, it seems that everything is being carried out smoothly. Following the approval of the price of 400 million euro by Socar for 66% of the company on Thursday, yesterday's statements of Azerbaijani representatives strengthened the feeling that things are moving along with the contract for Trans-Adriatic Pipeline TAP. In its statement, Socar emphasised that the holding has signed a contract with the Privatisation Agency for 66% of the gas company. Socar’s President Rovnag Abdullayev said that the decision for the acquisition of the transmission operator corresponds to current high level contacts between Greece and Azerbaijan, as well as between major energy companies in both countries. "Socar has extensive experience in transmission systems for natural gas in the Caspian Sea region and is expected to work in Greece on the first such project in the European Union," said the president of Socar.

Fitch warned

However, Fitch’s warning is creating problems. According to it, if the transaction is paid in cash, this will create pressure on the credit profile of Socar. Socar’s evaluation is moving along with that of Azerbaijan, since it is known that the company maintains close relationships with the government and state-owned Sofaz in terms of major investment and financial decisions. Fitch is concerned that if oil prices fall much below 105 dollars per barrel in 2013 and 100 dollars in 2014, Azerbaijan will have a higher deficit and, as a result, this will affect the evaluation of the country and its ability to support Socar, too.

The question of Greece’s participation in the company for the construction and management of Trans-Adriatic Pipeline will become clear over the weekend. Deputy Minister of Development Notis Mitarakis has been in Azerbaijan since yesterday, in order to attend the annual meeting of the Board of Directors of the Black Sea Bank for Trade and Development. During his stay in Baku he will also meet Azerbaijan’s Minister of Finance and President of the Board of Directors of the Bank Samir Sarifov.

Not in the competition

Russia’s Gazprom will not submit a tender in the new competition for the privatisation of the State Natural Gas Company, as announced by the head of the export department of the company. When asked whether Gazprom will make a new bid, Alexander Medvedev said: "No, we will not." It is noted that Athens, which is aiming at the collection of 1.8 billion euro from privatisation by the end of September, failed to attract a binding offer for the gas company last week and said that it would organise a new competition. Shortly after the Russian "no", Gazprom sources said that "in the case that a new competition for the privatisation of the company is announced, Gazprom will examine the conditions in detail and then decide on their participation."

What is happening with the privatisation process of the state lottery OPAP?

"No comment," replied the Director of the company. He added that this was the reply of the Privatisation Agency. Costas Louropoulos gave more details at yesterday's annual general meeting of OPAP, answering questions about the privatisation and the creation of a consortium with Ιntralot and Scientific Games, which is the main problem with the sale of 33% of the lottery. He said that it was a very complex process, and that there was a specific plan, but negotiations were still ongoing. According to him, this consortium agreement was created at the peak of the crisis in 2011, when market conditions were very different.

Explaining why OPAP will need the votes of the other two partners in decision-making, although it owns 67% of the consortium, he said that this applies to certain issues, such as increasing the share capital in order to protect minority shareholders, i.e. Intralot and Scientific Games. Louropoulos also emphasised that although OPAP has the money required, the management of the lottery needs the technical expertise of the two companies which are giants on the international market of betting games.

As for the dividend policy, yesterday shareholders approved the distribution of a 0.57 euro dividend, and the company's management said that they have proceeded to the distribution of the lowest rates in profits allowed by legislation - 35%, since the company will invest the remaining resources amounting to about 300 million euro this year and about 130 million euro next year.

Trans-Adriatic Pipeline: steps for the implementation of the agreement

Yesterday, Greece and Trans Adriatic Pipeline (TAP) consortium finalised the Host Government Agreement. This contract provides stability of the investment climate and late-stage trials of Athens for the support of the pipeline in the process of choosing the consortium Shah Deniz II.

Tags: privatisation Gazprom Privatisation Agency State Gas Company the National Gas Transmission System Operator State lottery OPAP Trans-Adriatic pipeline
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