Socar to extend guarantee letter for purchase of Greece's DESFA

TAGS: Energy, Privatizations

Azerbaijan’s state energy company Socar has agreed to extend a letter of guarantee for its acquisition of Greek gas network operator DESFA by a month, the office of the prime minister said on Tuesday.

The guarantee letter was due to expire on Friday and Socar had previously said it would only go ahead with the deal if the cost was cut significantly, given that a number of snags had emerged since it first agreed to buy DESFA in 2013.

Socar president Rovnag Abdullayev met Greek Prime Minister Alexis Tsipras on Tuesday to discuss the issue and the Greek statement said the meeting took place in a “positive atmosphere.”

“Within that framework, Socar announced it would extend its letter of guarantee for another month,” the statement said, adding that the two sides would hold talks to reach a mutually beneficial solution during that time.

Socar’s purchase of a 66 percent stake in DESFA hit a snag when the European Union ordered it to dispose of a 17 percent stake in the Greek operator on competition grounds.