Update 1 - German energy company SEFE hires Lazard to assist with privatization process

Rewritten to adjust the source of information, supplementing details and background information

Reuters Frankfurt, October 2 - According to two sources familiar with the matter, as Germany speeds up the restructuring of its energy landscape, German state-owned enterprise SEFE is working with investment bank Lazard LAZ.N to explore options for Berlin to sell the energy group.

SEFE (“Securing Energy for Europe”) was once a subsidiary of Gazprom GAZP.MM, but after Gazprom abandoned this business—which is vital to Germany’s energy supply security—SEFE had to accept a bailout of 6.3 billion euros ($7.1 billion) from the Berlin government in 2022.

Sources say that the sale process for SEFE is expected to begin in 2027, to avoid a conflict with Berlin’s current plan to sell a majority stake in peer company Uniper UN0k.DE—Uniper also received government support after the outbreak of the European energy crisis.

One source stated that, at present, the possibility of an initial public offering is unlikely.

SEFE has more than 2,000 employees and a broad business scope that includes operating 4,200 kilometers (2,600 miles) of natural gas pipelines, holding a quarter of Germany’s natural gas storage capacity, and running a large commodity trading division.

The company has repaid nearly 1 billion euros in government aid and supplies more than 200 terawatt hours of gas and electricity to over 50,000 industrial customers including local authorities and businesses.

SEFE achieved sales of 15.5 billion euros last year, with core profit reaching 789 million euros. In April, the company announced it had proposed a capital increase of up to 2 billion euros to the German Ministry of the Economy, which supervises its shares.

SEFE and Lazard both declined to comment.

According to EU state aid rules, Germany must reduce its stake in SEFE and Uniper to no more than 25% plus one share by the end of 2028.

Boersen-Zeitung was the first to report that Lazard had been hired.

(1 US dollar = 0.8890 euro)

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