Standard & Poor’s oil analyst, Karl Nietvelt told Econews on Tuesday that it’s not surprising to see MOL’s interest in trying to acquire a majority stake in INA. “It’s pretty well known” that when MOL initially bought 25% it was with the aim to eventually get a majority stake in the Croatian company, Nietvelt said. He wouldn’t discuss any potential ratings implication for MOL, however. MOL’s corporate rating is currently BBB- with stable outlook.
Merrill Lynch said in a comment released in London that in the context of MOL’s current BBB-/stable rating at S&P, it sees “very low flexibility” for MOL’s leverage as a large debt component “would be likely to see MOL downgraded”. However, recent press reports and government comments have suggested that a share swap is the intended structure, and based on this “our base case would have to be that the company is able to execute this transaction with a neutral rating impact”.
In a separate comment, Citigroup said that at this point “we worry that MOL has the financial flexibility to make a $2 billion bid for control of INA, given moves on ‘treasury’ shares, and increased investment in the upstream”. Since taking a 25% stake in INA in 2003 for $505 million, MOL has worked hard on restructuring the company, particularly in the downstream, but has been unable to progress to a controlling stake, unlike OMV’s successful consolidation of Petrom in Romania, Citigroup added. (MTI-Econews)
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
