The different philosophy in the strategy to be followed in order for Elpedison to grow in the rapidly changing energy environment was the main reason that led Helleniq Energy to move to acquire 50% of Edison, the shareholder and partner with whom they have been working together since 2009. According to Helleniq Energy's CEO Andreas Shiamishis, there were some issues in the market, such as institutional issues, Greece's adaptation to EU directives, and liquidity in the electricity market, which were exacerbated by the energy crisis, and the group had to plan its next moves.
ENERGY TRANSITION
A few years ago, announcing its Vision 2025 strategy, the Helleniq Energy group focused its future plan on the energy transition towards greener energy products and with natural gas as a bridge fuel to gradually move away from liquid hydrocarbons and towards green electrons, as Mr. Siasis said.
A transition, however, which, according to him, should be done in moderation and with realism. And with a strategy that takes into account not only the environmental footprint but also costs and energy supply.
DIFFERENT ROUTES
Discussions were then initiated with Edison to draw up a common strategy for Edison. "But since the shareholders seemed to have different views, we had to decide to go different ways," he noted while adding, "We believe in Greece, and we want to help, but not be captive to a consortium that has different strategies. Since there was incompatibility, we chose to take Edison's share. We both shareholders said it was beneficial to close the process quickly, both for our customers and for competition."
THE OFFER
He stressed that "we made an offer at a reasonable level. What the company will be worth after five years will depend on how we do our job." Helleniq Energy offered €164 million for 50%. The price, according to Siamisis, can be increased by €30m if certain claims from the scheme are collected within a reasonable period of time, of the order of 12 months, after the deal is completed. These are estimated to be in the region of €60m, which means that if the company collects them in that time, it will pay €30m to Edison. The company has some liabilities as well as receivables that could result in a range of +/- €50m in the price. It should be noted that the company also has a €130 million loan.
WHY NO COUNTERBID
Edison stressed that it did not choose to make a counterbid as its core business remains the Italian market. They look strategically at Greece, but at the end of the day they evaluated that they do not want to pay more and give more money than our offer, said Mr. Siamisis, who identified the enterprise value of the company at the level of €420-€470 million.
On how the 50% acquisition would be financed, Siamisis argued that €164m is by no means a problem, as the group has credit lines of more than €1.2bn. "We could even give it tomorrow," he said.
THE PROCEDURE
Having already made the binding agreement, within 1-2 months the transfer of shares and payment of the price will be completed, subject to approval by the regulatory authorities (RAE, Competition Commission). Provided there are no surprises, as expected, it is estimated that within 4–8 months the process will be completed.
THE FUTURE OF ELPEDISON
Helleniq Energy plans to further develop Elpedison, which in the last two years, due also to the different pace, has been... troubled and not sufficiently aggressive, as mentioned. He argued that the company will have an important role in the energy market, as it will have the ability to leverage one of the largest renewable energy portfolios in the country, promoting a greener profile, with gas remaining part of the product mix. He added that Elpedison has already invested half a billion euros in renewables and will follow up with another half a billion in the near future.
