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Hungary closes MOL stake buy

Hungary on July 6 closed the acquisition of a 21.2% stake in MOL from Russian peer Surgutneftegas, announcements of the two partners on the Budapest Stock Exchange website revealed.

The transaction raised the state's direct and indirect stake in MOL to 23.82% including 2.6% it acquired in a recent transfer of private pension fund assets of former members to the state, the announcements revealed.

Voting rights in MOL are limited to 10% per shareholder or shareholders' group.

The Hungarian government announced on May 24 that the state of Hungary will buy a 21.2% stake in oil and gas company MOL from Russia's Surgutneftegas for €1.88 billion.

When announcing the transaction in May, National Development Minister Tamás Fellegi said the state agreed to pay Surgutneftegas the stock exchange average price of the three months preceding the agreement, or HUF 22,400 per share, for the 22,721,253-share packet.

MOL closed at HUF 20,920 on Thursday, regaining its loss suffered earlier in the week on subsequently denied rumors that Croatian authorities asked for the extradition of MOL CEO Zsolt Hernádi in an investigation affecting MOL's Croatian unit INA.

The transaction was closed after Parliament in late June modified the 2011 budget, raising central budget expenditure by HUF 498.5 billion and the annual deficit by a similar amount to account for the cost of the acquisition among expenditure.

Fellegi said when the deal was announced that the state would use the unused part of an earlier loan from the IMF to pay for the purchase.

Hungary has about €2.5 billion of its IMF-led loan on deposit with the National Bank of Hungary, Econews reported in February. Hungary was granted the international loan after its bond markets locked up at the height of the financial crisis in the autumn of 2008.

Ownership rights over the newly acquired share packet will be exercised by the state assets manager MNV, the National Development Ministry said. The transaction was managed by UniCredit Bank.

Surgutneftegas acquired its stake in MOL from Austrian peer OMV for €1.4 billion in March 2009. MOL's management called the deal unfriendly and Hungary's president expressed concern about the transaction.

Surgutneftegas was never included in MOL's share registry for technical reasons and was unable to exercise its voting rights at shareholder meetings.

The announcement of the closing of deal revealed that the state had acquired the above-mentioned indirect 2.6% stake ─ 2,721,253 shares ─ in MOL through the transfer of private pension fund assets to the recently established Pension Reform and Debt Reduction Fund by the middle of June. The fund did not have to report the acquisition as it did not reach the legal reporting minimum of 5%.