Seeking Control, SYRIZA Drives Off Bids for State Enterprises

Hellenic Petroleum Facilities. (Photo: Eurokinissi, file)

With elections coming this year, Prime Minister and Radical Left SYRIZA leader Alexis Tsipras’ administration, reverting to his pledges to halt privatizations, has set such strict conditions for the sale of Hellenic Petroleum and other state enterprises that bidders were scared off.

While many state businesses weren’t doing well financial during a nearly nine-year-long economic and austerity crisis, Hellenic Petroleum is one of the biggest petrochemical businesses in Southeast Europe and profitable.

But with Tsipras simultaneously saying he wants foreign businesses and to meet privatization goals set by the country’s creditors – after vowing to halt them – the government said it wanted to let any buyer of the petroleum company to be subject to veto over management decisions, said the business newspaper Naftemporiki.

The international tender deadline for bids to acquire a 50.1-percent stake in Hel.Pe expired after two interested parties, Glencore and Vitol, not making an offer while alliances with Carlyle and Algeria’s Sonatrach didn’t persuade would-by buyers the government wouldn’t interfere and growing worry about the increasingly volatile energy situation.

The Greek state also wanted a majority representation on Hellenic Petroleum’s future board of directors, nullifying the owner’s stake and effectively giving the government control over a company it had sold off.

With creditors pushing Greece to sell state assets, HRADF,  the privatization agency created as a result of conditions tied to 326 billion euros ($366.48 billion) in three international bailouts said the failure to get a bidder for Hellenic Petroleum was because of “reasons that affect the candidate investors themselves and recent developments in the international scene, which influence the consortia,” without any reference to the government’s try to keep control.

The reference was attributed to a recent  coup in Algeria and a subsequent government shakeup, which is judged to have negated Sonatrach’s interest in the deal, the paper said.

Other conditions that worried possible investors was a requirement Hellenic Petroleum would stay listed on the Athens Stock Exchange (ATHEX) and the headquarters would have to remain in Greece, apparently the last straw for suitors.

Sources close to HRADF, which were not identified, told the paper the fund’s leadership was not willing to bow to would-be bidders’ demand to have control of a company it would own but which the government wanted.

That came after the fund was unable to sell of 3+1 lignite-fired units operated by the Public Power Corp. (PPC) and a deal to privatize the natural gas grid operation (DES.FA) also collapsed and as elements in SYRIZA are trying to keep out any foreign companies that Tsipras said were needed to bring a recovery as he tries to balance contradictory statements with an election coming this year and his party far behind in polls and unlikely to return to power once again.