The Russian Gazprom group has, surprisingly, submitted the smallest financial bid (less than $100 million) for the direct acquisition of 30% in Distrigaz Sud, Romania’s largest natural gas distributor, sources close to the privatisation process told Ziarul Financiar.
Gazprom was deemed by most analysts and market players as the most likely candidate to win the privatisation race.
The best bid for Distrigaz Sud was submitted by Gaz de France, with the German company Ruhrgas credited with the most chances of taking over Distrigaz Nord, for which Italy’s Enel has also made a very good offer, sources close to the privatisation process maintain.
The value of the bids submitted by investors for the acquisition of 30% in Distrigaz Sud ranges between $100-150 million.
According to market sources, after the two Romanian gas distributors are sold, Gazprom may very well reach an understanding with one or even both winners. Moreover, the Russians are trying to use their competitive edge over the other candidates, that is, Romania’s dependence on gas imports from Russia, which cover almost 30% of domestic demand.
The head of Gazprom, Alexei Miller, was in Bucharest last week and said that, should the Russians take over Distrigaz Sud, they intend to conclude a long-term gas supply contract, which Romania does not have at this moment.
Russia’s largest natural gas company, Gazprom, registered net profits of $5.5 billion and revenues worth $28 billion last year, which means it could easily purchase a company in the region. However, the Russians appear to be focussing on the transportation of gas through Romania towards Southern Europe, where Greece and Turkey represent very tempting markets and where Gazprom is looking to broaden its customer base.
Gazprom officials could not be contacted for comments at the time of going to press.
The Romanian State is directly selling 30% in each of the two natural gas distributors to an investor that will afterwards participate in a capital increase in order to obtain a final 51% stake in the company. Ruhrgas (Germany), Gaz de France (France) and Enel (Italy) last week submitted binding bids for Distrigaz Nord and Distrigaz Sud, with Gazprom only bidding for the latter. The German company Wintershall withdrew from the race for Distrigaz Nord for “strategic reasons.”
On the other hand, Enel focused more on Distrigaz Nord in its final bids, though it did also submit an offer for Distrigaz Sud.
As for the price, the State suggested to investors a value of $400 million for Distrigaz Sud and $250 million for Distrigaz Nord, based on certain assessments that start from the regulated asset base.
Consequently, the minimum price asked by the State for 30% in Distrigaz Sud amounts to $120 million, with the same stake in Distrigaz Nord being worth at least 75 million dollars. The total value of the two transactions together is therefore in the region of $480-500 million.