What’s behind the Motor Oil - Ellaktor deal?

There was more to the dynamic entry of the Vardinoyannis Group in Ellaktor with the acquisition of the 30% held by shipowners D. Bakos and G. Kaymenakis: The ultimate goal was the acquisition of the subsidiary Anemos, which is active in renewable energy sources (RES) and mainly in wind parks.

Motor Oil and Reggeborgh have formed an initial agreement for the acquisition of 75% of the share capital of a company that will be established and will own Ellaktor’s RES portfolio, with a total capacity of 493 MW, as well as a series of projects under construction of more than 1.6 GW. Ellaktor will participate with a 25% stake in the share capital in the new company, that has an an enterprise value of 1 billion euros.  The deal is subject to further adjustments depending on the profitability of the business and the structure of the transaction.

Anemos was a subsidiary of Ellaktor, but in 2018 it was absorbed by the parent company. In order to be sold it needs to be spun off again, so that Motor Oil can acquire it as a legal entity.

The renewable energy and hydrogen sectors are strategic choices of the Motor Oil Group. It has 280MW of wind and solar power – 220MW of which have been acquired from Fortress – while an additional 21 wind farms and seven storage units are under development. RES plants with a capacity of 84 MW are under construction and licenses with a total capacity of 650 MW are also under development. The group is also active in the production of hydrogen at the Aghioi Theodoroi refinery.

The imminent acquisition of Anemos will significantly strengthen Motor Oil's RES portfolio given that Anemos operates 493MW of wind energy, a 2ΜW photovoltaic park in Argolida, and a 4,95 MW hydroelectric power station in Grevena.  

Ellaktor's RES sector in 2021 recorded revenues of 105.7 million euros, up by 13% compared to 2020, and EBITDA of 84.4 million, increased by 15%. In fact, it was Ellaktor’s second most efficient sector after its concessions contracts.

The entrance of the Vardinoyannis family will substantially reinforce Ellaktor at a time when the company is seeking to claim Αttiki Odos and other important infrastructure projects. At the same time, it puts an end to the conflict between the two major shareholders (Reggeborgh - shipowners), which was an obstacle to the effort to reorganize Ellaktor and regain market confidence.

The funds that Ellaktor will receive from the sale of Anemos will serve the plans of Reggeborgh, which is none other than to strengthen the group's presence in concessions and constructions. They will also make it easier for the management to restructure debt and replace the pricey 670 million euro bond issued in 2019 with an interest rate of 6.4%.

The attitude of the Dutch towards the new partner will also be interesting. They had never managed to get along with the shipowners and had even excluded them from the board of directors, despite holding roughly the same stakes as them.

Sources indicate that the approach here will be different and that the necessary talks have been held. Also, what will happen with future investments in the RES sector needs to be clarified, given that Ellaktor has signed a strategic partnership with Portugal’s EDRP for the development of 900MW wind farms, with an estimated investment value of 1 billion euros.