Mol gets option to buy 10% of its shares from gov't
Thursday, December 1, 2005, 17:10
Mol Rt, the largest refiner in the 10 new European Union countries, got an option to buy its shares held by the Hungarian government, canceling the government's earlier plans to sell the stake to investors. Budapest-based Mol has an option to buy as much as 10% of its shares, worth $1 billion at market prices, the Hungarian government said in an e-mailed statement today. The state plans to sell its remaining 1.8% stake to Hungarian individuals. Mol will get a chance to build up its treasury shares after announcing it plans to triple oil and gas production and double sales of refined oil products by 2010. The company may use the shares for acquisitions and to fend off a potential takeover, Mol executives said.
"The option agreement ensures appropriate financial flexibility for the execution of Mol's growth strategy," Chairman Zsolt Hernádi said in an e-mailed statement. It "provides the company with stability to implement its long-term strategy and reduces the risk resulting from marketing the significant share package."
Hungary will retain a right to veto any sale by Mol of its shares to an industry buyer through 2015, the government said. The government most recently sold Mol stock in February 2004, raising $360 million by selling a 10.9% stake to investment funds.