August 9 (SeeNews) - A consortium formed by Romanian gas transmission company Transgaz [BSE:TGN] and France's GRTgaz has submitted a letter of intent to acquire 66% of the shares of Greek gas transport operator DESFA, Transgaz said.
"By partnering with GRTgaz in submitting the letter of interest in the competition for the selection of potential bid winners, Transgaz expresses its intention to contribute to increasing the predictability of the European energy market," the company said in a statement filed with the Bucharest Stock Exchange, BVB, late on Tuesday
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The sale of the majority stake in DESFA, handled by the Hellenic Republic's Fund for the Development of Assets (HRADF), is part of the measures agreed by the Greek government with the European Commission and international lenders as part of the wider program for the recovery of the Greek economy, Transgaz said. It is also confirmed as a key element of the reform package within the second revision of the Compliance Report prepared by the European Commission.
Rumors about Transgaz's interest in DESFA surfaced in December last year, when Greek newspaper Kathimerini reported, citing unnamed sources, that the Romanian company was interested in taking over a 66% share package in DESFA after negotiations of the Greek government with Azerbaijan's SOCAR oil group failed.
Transgaz said at the time that it was making analyses to determine whether it is beneficial to buy a stake in DESFA.
In 2013, SOCAR won a tender for acquisition of 66% of DESFA for 400 million euro ($427 million), but following Greece's January 2015 parliamentary election, the offered stake was cut to 49%. The deal was expected to be concluded by August 2015.
DESFA's majority shareholder is the government of Greece with 65% and Hellenic Petroleum with 35%. SOCAR was to buy 31% of DESFA from the Greek government and 35% from Hellenic Petroleum.
On December 1, the Greek government said that SOCAR's bid did not comply with its requirements and it had decided to terminate the negotiations.
At the end of September 2016, Transgaz and DESFA signed a memorandum of understanding, engaging to address existing and future joint projects for gas transmission in full compliance with the EU law.
Representatives of the two energy companies identified the need for further development and integration of respective gas markets on the internal energy market of the European Union. Also, they stated the importance of diversifying gas supply routes and creating access to new sources of gas, thereby improving gas supply security at regional and European level, the memorandum said.
Transgaz's shares were traded 0.51% lower at 390 lei on the BVB at 1107 CET.
($=0.8468 euro)