Azerbaijani state energy company SOCAR has announced that it will acquire the Greek natural gas transmission network operator DESFA through public funds.
The governing board of the Greek state privatization fund TAIPED approved the Azerbaijani company's revised offer for a 66 percent stake of DESFA in early August.
SOCAR Vice-President Suleyman Gasimov said that the acquisition of the DESFA assets for 400 million euros will be ensured by an increase of SOCAR's capital.
"DESFA is very attractive as an investment project. We believe that the profitability of the project will be satisfactory for both SOCAR and for the state," Gasimov said.
SOCAR offered 400 million euros for the purchase of 66 percent of shares, including 31 percent of the shares owned by the Greek state privatization fund and 35 percent of Hellenic Petroleum's stock.
A final decision of the European Commission on the transfer to SOCAR's control of the 66 percent stake in DESFA will be carried out in the second quarter of 2014.
The Hellenic Republic Assets Development Fund (HRADF) will have the control over the sold part of the shares till the end of the transfer, that is, the seller will retain control over DESFA till the end of 2014.
DESFA is a division of the Greek state gas company DEPA, whose privatization failed in June due to the lack of formal bids including that from Russian giant Gazprom, which had been considered the most likely buyer of DEPA.
The purchase of equity in DESFA will allow SOCAR to participate in various investment projects in the Balkan countries and, in particular, to be involved in the process of gas supply in Albania, which is currently insufficient.
SOCAR is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan. Three production divisions, two oil refineries and one gas refinery, an oil tanker fleet, a deep water platform fabrication yard, two trusts, one institution, and 22 subdivisions are operating as corporate entities under SOCAR.
The company owns gas stations in Azerbaijan, Switzerland, Georgia and Ukraine. It has representative offices in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, Britain, Iran, Germany and Ukraine, and trading companies in Switzerland, Singapore, Vietnam, Nigeria and other countries.