MOL to sell its 72% stake in Algyő strategic reserve

Deals

MOL has signed an agreement to sell its 72% stake in MMBF Földgáztároló, which operates the country’s strategic gas reserves, the oil and gas company announced today. The state will acquire 51% of the operator through the Hungarian Development Bank (MFB), and the Hungarian Hydrocarbon Stockpiling Association (MSzKSz) will acquire 21.46%, raising its stake in MMBF to 49%.

The transaction is expected to be closed by the end of 2013.

MOL signed a declaration of intent on the transaction with MSzKSz and the government in March.
MOL did not reveal the price of the transaction but said it was “based on asset valuation prepared by independent auditors” and included the “full settlement” of MOL and MMBF’s intercompany loans. The transaction is fully cash-based, MOL said.

MOL said the transaction was in line with a strategy to clean up its portfolio and concentrate on its core businesses. The proceeds from the transaction will be invested in “highly profitable projects” within these core activities, it added.

Népszabadság reported on Saturday that MOL’s stake in MMBF would cost about HUF 140 billion, without citing any sources.

The strategic reserves were created with the conversion of a gas field in Algyő owned by MOL. The conversion, completed in the autumn of 2009, cost HUF 150 billion (approximately €494.58 million) and was supported with a €200 million loan from the European Bank for Reconstruction and Development (EBRD).

The facility in Algyő has capacity for 1.2 billion cubic meters of strategic gas and an additional 700 million cubic meters of commercial gas.

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