Greece asks SOCAR to extend tender term on DESFA deal

Hellenic Republic Asset Development Fund (HRADF) requested from Azerbaijan’s state oil company SOCAR to extend the term of a letter of guarantee on the tender to buy a 66-percent stake in the Greek national gas transmission system operator DESFA by one month, the Greek media reported Oct. 31.

It was noted that a particularly important meeting between the Greek side and representatives of SOCAR and Italy’s Snam SpA will be held on Oct. 31.

"Today is the deadline for SOCAR’s letter of guarantee and HRADF requested to extend it for another month,” the Greek media reported. "Meanwhile, the Azerbaijani side is seeking for obtaining written guarantees from the Greek side before giving consent to an extension.”

The Azerbaijani and Italian companies think that the price of 400 million euros for 66-percent stake in DESFA is overestimated, considering the recent changes in legislation, and call the price of 300 million euros appropriate.

The Greek side, in turn, strongly rejects the reduction in the initial price and has informed SOCAR and Snam about its position, according to the report.

In September 2016, SOCAR already extended the term of a letter of guarantee on the tender to buy a 66-percent stake in DESFA until Oct. 31, 2016.

SOCAR won a tender in 2013 on the purchase of a 66-percent stake in DESFA for 400 million euros.

The Azerbaijani company will obtain 31 percent from the Greek government and will buy the complete package of 35 percent of the Hellenic Petroleum.

It is expected that the deal will be closed only after the purchase of at least a 17-percent stake out of SOCAR’s 66-percent stake by Italy’s Snam.