MOL hires six banks for €2 billion loan

Deals

Hungarian oil giant MOL has commissioned six banks, Citigroup, Royal Bank of Scotland, BNP Paribas, Bank of Tokyo-Mitsubishi, ING and Bank Austria Creditanstalt, for a syndicated loan of €2 billion ($2.8 billion), the communications director Dóra Somlyai confirmed the information reported by news agency Reuters.

The revolving credit has a duration of 3 years from six banks - Citigroup Inc., Royal Bank of Scotland Group Plc, BNP Paribas, Bank of Tokyo-Mitsubishi UFJ Ltd., ING Groep NV and Bank Austria Creditanstalt AG, for a syndicated loan of €2 billion ($2.8 billion) - and MOL Nyrt intends to use it to finance business and strategic investments. The parties are expected to sign the loan agreement in October, the communications director added.

Chairman Zsolt Hernádi denied earlier reports that the purpose of the loan is to finance a share buyback program, designed to fend off what the company calls an „unwelcome” approach from Vienna-based OMV AG. „It’s a general purpose loan,” Hernádi said today in an interview in Budapest. „We have several projects and upgrades going on. I can’t exclude the possibility that some of this will be spent on shares, but it wasn’t earmarked for the buyback.” OMV doubled its stake in MOL to 19% in June and called for merger talks, which the Hungarian refiner has rejected.

MOL said last month it will build gas-burning power plants adjacent to the Hungarian company’s refineries with CEZ AS, central Europe’s largest power company. MOL is shifting to exploration and production after buying refineries and filling stations in eastern Europe. This month the company signed a deal with Ina Industrija Nafte d.d., Croatia’s state-owned oil company, to expand their joint exploration of a gas field stretching across the border of Croatia and Hungary. Shares in MOL have surged 18.1% this year. (Bg, Gazdasági Rádió, Napi Gazdaság 13)

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