October 31, 2019 / 2:32 PM / a month ago

Greece to split gas company DEPA, sell 65% stake: deputy energy minister

ATHENS (Reuters) - Greece plans to spin off the distribution grid and commercial operations of majority-state owned natural gas company DEPA and to sell its 65% stake in the two new firms, its deputy energy minister said on Thursday.

The conservative government, which came to power in July, wants to speed up privatizations in the energy sector and attract foreign investment as the country emerges from a decade-long debt crisis.

Deputy Energy Minister Gerasimos Thomas said the sale process is expected to begin “very soon”, at the end of the year or the beginning of next year. The remaining 35% of the new entities will be held by Hellenic Petroleum.

He said there was strong interest from foreign investors in the utility, which imports gas from Russia, Turkey and Algeria.

“We believe that the privatization will give the chance to make better use of and develop distribution networks in the country,” Thomas said. “Gas penetration is low.”

A third company will remain state-owned after the split and will be in charge of the pipeline schemes, including a trans-border natural gas pipeline between Greece and Bulgaria known as IGB, Thomas said.

DEPA’s privatization was discussed at a cabinet meeting chaired by Prime Minister Kyriakos Mitsotakis on Thursday.

The previous government had legislated a split in DEPA operations, aiming to sell a 50.1% stake in its retail business and a minority stake in its distribution grid.

Mitsotakis’ government has prepared a bill amending that legislation, further liberalising the energy sector and reforming state electricity company PPC.

Energy Minister Kostis Hatzidakis told reporters on Thursday the bill introduces flexible wage contracts that would boost hirings in PPC, scrap a 75% discount on electricity bills for employees and pensioners in place since 1990, and set conditions for voluntary exits.

“PPC has managed to stick its head out of the water... but it still faces an uphill struggle,” Hatzidakis said.

Writing by Renee Maltezou; Editing by Alexandra Hudson and Jan Harvey

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