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Editorial

Privatisation Alert

The Hellenic Republic Asset Development Fund (the Fund) launches a tender for the sale of the shares of the HELLENIC COMPANY FOR ROLLING STOCK MAINTENANCE S.A. (ROSCO)

 

 

21 August 2013

 

Background

 

The Fund has launched an International Tender for the sale of the shares corresponding to 100% of the share capital of ROSCO, which are owned by the Fund.

ROSCO is currently the sole provider of rolling stock maintenance services in Greece and has recently acquired, via spin-off, the business of the maintenance (but not the ownership) of the rolling stock of the Hellenic Railways Organization ("OSE").

It is envisaged that ROSCO will have concluded the following strategic contracts prior to the completion of the tender procedure:

(i)      a long-term maintenance contract with TRAINOSE for the maintenance of the rolling stock used by TRAINOSE (TRAINOSE is the sole provider of track services for the rail transportation of passengers and freight in Greece; the privatisation process of TRAINOSE was launched on 12 July 2013 and is currently in progress) and

(ii)     a number of long-term lease contracts for the lease of key real estate assets which are essential for the provision of maintenance services; such assets are currently owned by TRAINOSE but will be transferred to the Greek State before the completion of the envisaged privatisation of ROSCO.

Under the Law establishing ROSCO, ROSCO is entitled to provide maintenance services to rolling stock of third parties as well.

Tender Process

The Tender will be conducted in two phases. In the first phase the interested parties will submit an Expression of Interest accompanied by specific documentation relating to their ability to meet the prequalification and eligibility criteria (see below). The parties who are prequalified will be then invited to submit a binding offer during the second phase of the tender.

 

Prequalification Criteria (1-3)

 

1.      Legal Eligibility Criteria

They include verification of a number of good standing and legal compliance criteria.

 

2.      Financial Capacity Criteria

 

Any Interested Party wishing to submit an Expression of Interest is required to demonstrate that:

 

·                Its average annual consolidated equity position (calculated as total consolidated assets minus total consolidated liabilities for the most recent three (3) audited financial years) exceeds Euro fifty million (€ 50,000,000) (such criterion applies for corporate entity candidates)

 

·                the sum of its active and un-invested/uncommitted funds for the latest financial year exceeds Euro one hundred million (€ 100,000,000) (such criterion applies to private equity firms and/or funds).

 

In the case of a consortium, the Financial Capacity Criteria must be satisfied by each consortium member pro rata to its stake in the consortium, as specified in the Expression of Interest.

 

3.      Technical Capacity Criteria

 

Average annual turnover realised during the most recent five (5) audited financial years from maintenance services of traction equipment (electric and diesel locomotives) and train sets (EMU, DMU) and cars that exceeds a threshold of Euro fifty million (€ 50,000,000). Such maintenance services must include:

 

(i)      maintenance of locomotives and train sets produced by at least two manufacturers; and

(ii)     integrated maintenance of rolling stock (entire train sets and/or individual vehicles and not just vehicle components).

 

In the case of a consortium, the Technical Capacity Criteria must be fulfilled by the leader of the consortium (i.e. an entity holding a stake of at least 34%).

 

Requirement for disclosure of identity of Interested Parties

 

The ownership of each Interested Party (or, in the case of a consortium, of each consortium member) must be disclosed and identified up to said Party's ultimate legal and beneficial owners holding 5% or more of its share capital. After submission of an expression of interest, any change in the ultimate legal and beneficial ownership of 5% or more of the share capital of a single candidate or, in case of a consortium, of any consortium member, must be promptly notified to the Fund.

 

Deadline for submission of expressions of interest for phase A of the tender: 30 September 2013.

 

The financial and technical advisors of the Fund on this project are the Investment Bank of Greece, Kantor Management Consultants and Louis Berger.

 

Detailed information on the tender process and eligibility and prequalification criteria is available at the Fund's website (www.hradf.com).

 

For further information on the subject matter or on our newsletters, please contact:

 

Ilias Koimtzoglou at: i.koimtzoglou@zeya.com

or

newsletters@zeya.com

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