Complex quaternary chalcogenides (AgSb)xPbn-2xTen (0<x<n/2) are thought to be narrow band-gap semiconductors which are very good candidates for room and high temperature thermoelectric applications. These systems form in the rock-salt structure similar to the well known two component system PbTe (x=0). In these systems Ag and Sb occupy Pb sites randomly although there is some evidence of short-range order. To gain insights into the electronic structure of these compounds, we have performed electronic structure calculations in AgSbTe2 (x=n/2). These calculations were carried out within ab initio density functional theory (DFT) using full potential linearized augmented plane wave (LAPW) method. The generalized gradient approximation (GGA) was used to treat the exchange and correlation potential. Spinorbit interaction (SOI) was incorporated using a second variational procedure. Since it is difficult to treat disorder in ab initio calculations, we have used several ordered structures for AgSbTe2. All these structures show semimetallic behavior with a pseudogap near the Fermi energy. Te and Sb p orbitals, which are close in energy, hybridize rather strongly indicating a covalent interaction between Te and Sb atoms.