- Title: CROATIA/HUNGARY: Croatian government and Hungary's MOL strike deal on INA
- Date: 3rd February 2009
- Summary: ZAGREB, CROATIA (JANUARY 30, 2009) (REUTERS) EXTERIOR OF INA HEADQUARTERS "INA OIL INDUSTRIES" SIGN ON BUILDING CROATIAN GOVERNMENT DELEGATION AND MOL DELEGATION ENTERING ROOM AND TAKING SEATS PHOTOGRAPHERS TAKING PHOTOS CROATIAN DEPUTY PRIME MINISTER DAMIR POLANCEC, AND MOL EXECUTIVE CHAIRMAN ZOLT HERNADI, SIGNING SHAREHOLDER AGREEMENT JOURNALIST TYPING POLANCEC AND HERNADI SHAKING HANDS REPORTERS WRITING (SOUNDBITE) (Hungarian) MOL EXECUTIVE CHAIRMAN ZOLT HERNADI, SAYING: "From now on, the MOL group will laugh and cry together, our fates have been tied," MOL AND CROATIAN GOVERNMENT REPRESENTATIVES LISTENING TO REPORTERS' QUESTIONS (SOUNDBITE) (English) MOL EXECUTIVE CHAIRMAN ZOLT HERNADI, ANSWERING QUESTION ON WHETHER MOL PLANS TO LIFT ITS STAKE, SAYING: "I thought that we know each other very well and he (the reporter asking the question) knows exactly that I won't give an answer." (SOUNDBITE) (Croatian) CROATIAN DEPUTY PRIME MINISTER DAMIR POLANCEC, SAYING: "Taking into account the effects of the financial crisis, and a sharp fall in value of shares generally, and especially in the central European region." MEDIA LISTENING (SOUNDBITE) (Croatian) CROATIAN DEPUTY PRIME MINISTER DAMIR POLANCEC, SAYING: "We have concluded that at this moment there are too many risks regarding an assessment of the value of both shares." TWO DELEGATIONS SHAKING HANDS, TAKING DRINKS AND LAUGHING CARS AT INA PETROL STATION SIGN WITH PRICES OF PETROL AND DIESEL MAN PUTTING DIESEL IN CAR
- Embargoed: 18th February 2009 12:00
- Topics: International Relations,Domestic Politics
- Reuters ID: LVAE09XAG3HJ5L6YXJXVSNDIMLNE
- Story Text: Hungarian oil firm MOL struck several deals with Croatia's government on Friday (January 30) to gain control over oil firm INA and sell INA's loss making natural gas business.
MOL, INA's biggest shareholder with a 47 percent stake, signed a shareholder agreement with the Croat government, which holds a 44 percent stake, that gives MOL a controlling influence over management and five of nine supervisory board seats.
In a separate deal, the Croatian government agreed to take over INA's natural gas storage unit immediately and its wholesale unit by July 1, freeing MOL of a loss-making business and a major regulatory risk.
Analysts said Friday's deals were positive, particularly the sale of the gas business as it makes INA's operations more predictable, but INA will nevertheless suffer this year due to difficult market conditions.
"From now on, the MOL group will laugh and cry together, our fates have been tied," MOL Executive Chairman Zsolt Hernadi told a news conference in Zagreb.
A new shareholder agreement became necessary when the previous deal expired late last year and after MOL lifted its stake to 47.2 percent through a public bid.
As part of the sale, the gas wholesale unit will sign a long-term supply deal with INA that will let gas prices rise gradually to import parity between 2010 and 2014.
"Via these agreements, the risks related to future gas price and royalty regulation are decreased significantly ... (and) convergence of gas prices to international market prices is secured," MOL said in a written statement.
Trading in MOL shares was suspended Friday, while INA shares were up
9 percent at 1,150 kuna at 1310 GMT.
As part of the shareholder deal, MOL has agreed not to sell any INA shares for five years but the deal does not prevent MOL from lifting its stake, possible above 50 percent.
MOL's five-year lock up period will be shortened to two years if MOL and the Croat government do not conclude a share swap during that period.
Such a deal was discussed but abandoned after MOL's bid for INA and as the global financial crisis hammered stocks.
"Taking into account the effects of the financial crisis and a sharp fall in value of shares generally and especially in central European region... we have concluded that at this moment there are too many risks regarding an assessment of the value of both shares," Croatian Deputy Prime Minister Damir Polancec told the news conference.
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