The government submitted to Parliament amendments necessary for the state's purchase of a 21.2% stake in Hungarian oil and gas company MOL.
The amendments submitted by National Economy Minister György Matolcsy propose raising central budget expenditures by HUF 489 billion to HUF 14,337 billion and increasing the deficit to HUF 1,184 billion.
Under the amendments, Parliament is to approve the purchase of the 22,179,488 MOL shares. The amount paid for the shares may not to exceed €1.88 billion.
The government announced on May 24 that it reached an agreement to pay Russia’s Surgutneftegas €1.88 billion for a 21.2% stake in MOL.
Surgutneftegas acquired a stake in the Hungarian oil group from Austrian peer OMV for €1.4 billion in March 2009. MOL called the deal unfriendly and Hungary's president expressed concern about the acquisition.
Surgutneftegas was never included in MOL's share registry for technical reasons and was unable to exercise its voting rights at shareholder meetings.
National Development Minister Tamás Fellegi said when the deal was announced that the state would use part of a loan from the IMF to pay for the stake. The purchase price will not raise government debt nor will it cause the fiscal deficit to grow because it is being paid from an already drawn loan, he said.
Hungary has about €2.5 billion of its IMF-led loan on deposit with the National Bank of Hungary. Hungary was granted the loan after its bond markets locked up at the height of the financial crisis in the autumn of 2008.
The purchase of the MOL stake is to be concluded by August 31, Fellegi said.