Are you sure?

Croatia shelves INA share swap, sale to MOL

MOL controls 47.15% of Croatia’s biggest energy company after buying a 22.15% stake in a public tender that closed last month. Local media speculated this week that MOL had already secured majority influence in INA through some “friendly investment funds”. “We have given up on the share swap or the sale of some more shares for the time being. At the moment, it does not suit us or them,” a government source told Reuters on Friday. “But we have managed to negotiate a new shareholders’ agreement, under which MOL has no right to sell INA shares in the next five years,” the source said.

After the five-year lock-up, Croatia will have a pre-emptive right to buy back the shares if MOL decided to sell, or was itself a takeover target by some of the oil majors. The source said the two sides also agreed to outsource INA’s loss-making gas business, which suffers because of a government cap on prices. “INA will continue with its own natural gas production. But purchase and distribution of gas will be handled by the new firm, which will be state-owned,” the source said.

Otvoreni Radio, a local news radio, reported after a cabinet session that the government has shelved talks with MOL. It said Deputy Prime Minister Damir Polancec would announce the government’s future moves at the next cabinet session. MOL and the Zagreb government resumed talks this month on a new shareholders’ agreement for INA. Croatia plans to reduce the state holding to 25% before joining the European Union, which is expected in 2010 or 2011.

INA is a dominant fuel retailer in Croatia and is also present in neighboring former Yugoslav countries. It has upstream and downstream segments and is involved in gas and oil exploration and drilling in the Middle East and Africa. (Reuters)