11 Jun 2013

Greek stocks down after no bid for DEPA

7:16 am on 11 June 2013

Stocks in Greece plunged almost 5% on Monday after the government said it did not receive any bids for DEPA, a natural gas firm, marking a setback to its privatisation programme.

DEPA had been expected to sell for around 900 million euros. The BBC reports it's sale is key to Greece meeting a privatisation target set as a condition of its bailout by the EU and the IMF.

Gazprom had been expected to bid .

Gazprom spokesman Sergei Kupriyanov said the company did not submit a bid, due to concerns over Depa's financial viability.

He said the firm was already experiencing difficulties with users' unpaid bills.

Government officials said the Hellenic Republic Asset Development Fund, the privatisation agency, didn't receive any bids for DEPA and only offer offer for its sister company, DESFA, a gas grid operato.

Greece started the sales process last year and the deadline for bids was Monday.

In exchange for two EU-IMF bailouts, Greece has agreed to raise 9.5 billion euros in asset sales by 2016.

The BBC reports the target was originally set at 50 billion euros in 2010, but has been repeatedly reduced due to Greece's slow progress on privatisation.

Greece will struggle to meet its debt targets if it fails to meet its privatisation target.

The Athens Stock Exchange General Index closed down 4.69% at 939.78