Thursday, 30 December 2021

Croatian Government Pauses Buyback of MOL's Stake in INA

ZAGREB, 30 Dec 2021 - The government is pausing the buyback of the Hungarian energy group MOL's stake in the INA oil and gas company because of new legal circumstances arising from a Supreme Court verdict and is launching a review of the shareholders' agreement and the gas business agreement, Prime Minister Andrej Plenković said on Thursday.

Speaking at the start of the cabinet meeting, Plenković said that proceedings against the first amendment to the INA shareholders' agreement and the gas business agreement were being launched because the government believes that in light of the Supreme Court's final judgment the agreements cannot be sustained.

In late October, the Supreme Court upheld the trial court verdict sentencing former Prime Minister Ivo Sanader to six years in prison for taking a bribe from MOL CEO Zsolt Hernadi. Hernadi, who remains beyond the reach of the Croatian authorities, was given two years in prison.

Plenković said that the government's decision was based on legal opinions, adding that the government had consulted the State Attorney's Office, the International Law Department at the University of Zagreb's Faculty of Law, and the government's legal representatives in proceedings with MOL.

"In these changed circumstances, we consider it opportune to pause the process of the possible buyback of shares which MOL holds in INA until this new legal circumstance has been resolved," the prime minister said.

The Croatian government and MOL signed the first amendments to the INA shareholders' agreement and the gas business agreement on 30 January 2009.

Under the amendments, the number of Supervisory Board members was increased from seven to nine, with five seats allocated to MOL, three to the government, and one to the employees. The Supervisory Board chair is designated by the government.

The Management Board has six members, of whom three represent the government and three MOL, while MOL nominates the Management Board chair, who has a casting vote.

The master gas business agreement provided for the sale of the Okoli gas storage facility and the gas trading company to the government. In December 2009, the government and MOL signed the first annex to the gas business agreement under which the government's obligation to buy the gas business was delayed until 1 December 2010.

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Saturday, 20 February 2021

INA-MOL Saga: Hungarians Seeking Far More Than Croatia is Offering

February the 20th, 2021 - The INA-MOL saga has oulived both the Agrokor (remember that?) and the fighter jet purchase sagas, and the Hungarians are now wanting much more than Croatia has to offer in that regard.

As Poslovni Dnevnik/Darko Bicak writes, the Hungarian MOL confirmed recently that talks with the Croatian Government about the INA-MOL saga, more precisely on the sale of a controlling stake in INA are continuing, and Bloomberg and Hina both quoted MOL CEO Jozsef Molnar as saying that their views on the price of that stake were "quite far apart".

In a recent conversation with analysts, held after the announcement of MOL's business results for last year, it was said that MOL was never against the agreement, but that wanted to sell its stake in INA at a price that would properly compensate it for its investments in the Croatian company.

If you haven't followed the INA-MOL saga in detail, the Hungarian MOL is otherwise the largest individual shareholder of INA, as it holds 49.1 percent of INA shares (4,908,207 shares), while the Croatian state holds 44.8 percent (4,483,552 shares), and private and institutional shareholders hold 6.1 percent of shares (608,241 shares).

Back in early February this year, Minister of Economy and Sustainable Development Tomislav Coric said that talks were underway with MOL to buy out its stake in INA and that the whole story about the Croatian oil company should not be prolonged beyond the second half of this year.

At a press briefing held on February the 10th, he said that a series of meetings had been held to buy MOL's stake in INA and that the government had made its offer to buy MOL's stake in INA back in November last year, without providing any further details about the offer.

“Over the next few months, let's say over four to five months, we're going to have to know exactly which direction has been chosen. If the transaction is needed after that, it will all take some time,'' said Coric.

Coric also said that the direction that the Croatian Government doesn't support and which is not optimal for Croatia is to maintain the status quo, while from the beginning they've wanted an agreement to be reached between the Croatian Government and the Hungarian side on the purchase of shares in INA.

The latter direction potentially includes a third party, in the sense that the Hungarian side leaves the ownership of INA entirely and is replaced by someone else. In addition, if the Hungarian side is ready to sell its shares in INA, there is an option for Croatia to buy them itself, ie through an arrangement of legal entities from Croatia, which would certainly, at least in one sense, affect the increase of public debt, which was not the Government's wish.

As a third option, if no agreement is reached on the purchase price in the INA-MOL saga, he stated that the agreement would then in the direction of redefining the relationship between the partners within INA, in a way that would see a balanced relationship between the two shareholders, including positions in the company's management, with all of the accompanying obligations and rights implied.

It's worth mentioning that back at the end of 2016, Prime Minister Andrej Plenkovic announced that the Croatia Government had decided to buy MOL's entire stake in INA, after Croatia lost the lawsuit against MOL before the arbitration court of the United Nations  UN) Commission for International Trade Law in Geneva.

An investment advisor in that transaction, the consulting company Lazard, presented a preliminary report on the in-depth survey of INA's business and its value in June last year, and in September 2020, a final report on the assessment of INA's value was made.

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Wednesday, 26 August 2020

INA's Layoffs Decision Is Business Decision, Says Minister

ZAGREB, Aug 26, 2020 - Economy Minister Tomislav Coric said on Wednesday INA's decision to lay off 250 workers was a business decision, and that INA recently submitted a proposal to the Strategic Projects Commission to declare the Sisak biorefinery a strategic project.

Asked by the press to comment on the announcement that 250 INA workers would lose their jobs, Coric said there was no satisfaction if people lost their jobs at the end of a process of transformation, but that INA's business decisions of several years ago were going in that direction.

"The thing that we can express satisfaction about, is that the workers are leaving with relatively favorable severance packages."

The oil company said earlier this week that, given the circumstances of operating during a pandemic, the INA Group began organizational changes and that the restructuring would cover a maximum of 250 workers. This news has caused great concern in the town of Sisak and the Sisak refinery, whose workers have warned that the layoffs would halve the refinery's staff.

Asked about the layoffs, Coric said the company's direction was its decision and that the global oil business was in trouble because of the coronavirus and other circumstances.

He said he was pleased that INA's proposal to declare the biorefinery in Sisak a strategic project, was recently submitted to the Strategic Projects Commission.

We are pleased about that because I think that the direction which INA is taking in fact - a sustainable, green direction - is the right one, Coric added.

INA council to discuss Lazard's final report soon

The minister said the government received Lazard's final report on INA. The company is the government's advisor on the possible buy-back of MOL's stake in INA.

He added, however, that the make-up of the council on negotiations with MOL on the possible purchase changed last week. "In the weeks ahead, that report will be presented to the council members and then we will go a step further."

Asked if the political decision to buy back the stake was still on, Coric said the government decided to do that in 2016 and that the decision was confirmed in the HDZ's platform for this year's parliamentary election.

"We will try to enter into talks with the other side, present our offer and try and restore Croatia's ownership of INA."

A member of the press remarked that consultants said the buyback was not worth it. Coric said that he did not have that information.

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Friday, 5 May 2017

“MOL Is Ready to Sell INA to Croatian Government”

More on MOL’s plans with the Croatian national oil company.

Saturday, 28 January 2017

Government to Hire Consultants to Assess Value of INA

Prime Minister Plenković is in talks with Hungarian Prime Minister Orban about buyback of MOL’s share in INA.

Saturday, 14 January 2017

Croatia to Challenge INA-MOL Arbitration Ruling

Prime Minister Plenković speaks about INA and other issues.

Monday, 9 January 2017

Poll: Majority against Government’s Plans for INA and HEP

It seems that most people do not trust government’s claims about supposed national interest.

Saturday, 7 January 2017

Croatia to Pay 30 Million Dollars for Lost Arbitration with MOL?

Unfavourable arbitration ruling means that Croatia will have to cover most of the costs.

Tuesday, 3 January 2017

HDZ and MOST at Odds about Future of HEP and INA?

Disagreements about INA have already brought down one government.

Saturday, 31 December 2016

Prime Minister Explains Government Position with Regards to INA

MOL’s share in INA will probably be bought by partial privatization of Croatian Electrical Company (HEP).

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