Azerbaijan energy leader Socar on Tuesday said it was extending a letter of guarantee to purchase a majority stake of Greek natgas grid operator DESFA by one month, following a meeting in Athens the same day between the company’s top executives and Greek Prime Minister Alexis Tsipras.
Azerbaijan energy leader Socar on Tuesday said it was extending a letter of guarantee to purchase a majority stake of Greek natgas grid operator DESFA by one month, following a meeting in Athens the same day between the company’s top executives and Greek Prime Minister Alexis Tsipras.
A deal to sell-off a large stake of DESFA and its management to Socar appeared to have soured recently, with the Azeri side demanding either a price cut or the repeal of a controversial clause inserted into a purchase agreement by the relevant Greek energy ministry.
Socar had placed a winning bid of 400 million euros in an international tender back in 2013 for 66 percent of DESFA’s shares.
The one-month extension of the letter of guarantee is apparently aimed at continuing last-ditch negotiations in a “make-or-break” round.
The potential privatization has already faced close scrutiny by the EU Commission, which has demanded that 17 percent of DESFA shares – deducted from Socar’s stake -- be sold to a third party, meaning the Baku-based company would be left with just under a majority of shares, at 49 percent.
Socar’s leadership has criticized an inserted clause which places conditions on the manner in which transmission rates will be calculated, retroactively, from 2006 onward. The move, according to the Azeri side, would have led to a rate hike for 2017 but in figure that were less than anticipated, thereby decreasing the revenue calculated by Socar when it signed the preliminary agreement.