Hungarian oil and gas company MOL and the government of Croatia signed a contract on the separation and sale of INA's gas business as well as changes to a shareholders' agreement.
Under the gas business contract, terms were established for the separation and sale of INA's gas trade and storage activities. The gas storage business was sold at the time of the signing of the contract to state-owned Plinacro for HRK 514 million (€69.8 million). The sale of the gas trade business will be closed by July 1, 2009.
MOL, which raised its stake in INA to 47.16% in a public purchase offer last autumn, has been in talks with the government, which holds 44.85% of INA, for months on spinning off INA's loss-making gas business.
The gas trade company will sign a long-term supply agreement with INA for gas INA exploits in Croatia. The sale price of the gas produced by INA will gradually reach import parity between 2010 and 2014, while the government and INA will also conclude a long-germ royalty agreement for hydrocarbon production of INA in Croatia.
Under the changes to the shareholders' agreement, MOL will delegate three members, including the chairman, to INA's six-member board. The Croatian government will delegate the other three members. The chairman's vote is the tie-breaker, but the government has veto rights ensuring the national security of energy supply and some decisions affecting strategic assets of INA.
MOL will delegate five members to INA's nine-member supervisory board.
MOL agreed to hold its shares in INA for at least five years, to be shortened to two if no share swap takes place during the period. Following the lock-up period, the government will have a right of first refusal. The government has a pre-emption right for INA shares in the case of a hostile takeover of MOL.
The shareholder' agreement is in force indefinitely or as long as both parties hold at least 25% plus one vote apiece in INA.
MOL CEO Zsolt Hernádi said the agreement was advantageous for everybody, adding that MOL and INA have known each other for years.
Under MOL's management, INA's competitiveness, efficiency and profit-generating ability will improve, MOL said. Another aim is to create synergy between the two companies. As a first step, INA will open two petrol stations in Hungary at the beginning of February.
The amendments to the shareholders' agreement must still be approved by the competition authorities. A general meeting of INA shareholders is likely to be held in the first half of 2009, allowing the new supervisory board to be appointed. (MTI – Econews)