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State seeks limits to guarantee on E.ON gas business purchase

The state guarantees 80% of the price for the Hungarian gas business of German utilities giant E.ON, according to an amendment to the 2013 budget act submitted to Parliament by the national development minister. The amendment sets the absolute threshold of the guarantee -- good until September 30, 2013 -- at HUF 256 billion. Calculating with the current National Bank of Hungary euro-forint pair, the amount comes to €867 million, suggesting the total price for the business is about €1.084 billion. The budget act at present shows the state guaranteeing at most €875 million -- calculated at an exchange rate contained in the sales contract -- for the purchase of the share of E.ON's two gas units in Hungary plus at most HUF 90 billion for the gas reserves of the business. Prime Minister Viktor Orbán said in February that Hungary had purchased the gas business for well under the maximum price decided by the government. He said reports that put the purchase price of the business at around €800 million were "not unrealistic".