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Hungary buys back MOL stake from Surgutneftegas

Hungary has bought back a 21.1% stake in Hungarian oil and gas company MOL from Russian peer Surgutneftegas, Prime Minister Viktor Orbán said on Tuesday.

Hungary paid €1.88 billion for the stake, National Development Minister Tamás Fellegi said.

The stake is worth HUF 517 billion, calculating with the share price of HUF 23,310 before trade in MOL was suspended early in the afternoon on Tuesday.

Orbán said the transaction was more than a buy, it was a difficult struggle with an agreement reached only after a year of tough negotiations.

"We have taken an important step on the path to a strong Hungary, as a country cannot be strong if it is entirely vulnerable in terms of energy supply."

Fellegi said the state is using part of an earlier loan from the IMF to pay for the buyback. The transaction must be closed by August 31, he added. The government supports MOL's strategy and its management, he said.

Because of the transaction, revenues in the budget act will have to be diverted, Fellegi said. The agreement with Surgutneftegas must be approved by Parliament, he added.

Hungary has about €2.5 billion of its IMF loan on deposit with the National Bank of Hungary, Econews reported in February.

Hungary was granted the loan after its bond markets locked up at the height of the financial crisis in the autumn of 2008.

MOL shares were up more than 4% from the previous close, rising on speculation before the announcement.

Surgutneftegas acquired a stake in MOL from Austrian peer OMV for €1.4 billion in March 2009. MOL's management called the deal unfriendly and Hungary's president expressed concern about the transaction.

Surgutneftegas has still not been included in MOL's share registry for technical reasons and has been unable to exercise its voting rights at shareholder meetings.

The company has contested the lack of inclusion in court, but rulings have always been in favor of MOL.

MTI earlier learnt that Surgutneftegas has not been included in MOL's share registry because of concerns about the transparency of the Russian company's ownership structure.

Surgutneftegas's press department declined to comment on Orbán's announcement when asked by MTI.