Croatia, Dead end in negotiations for INA’s shares buyout

, SEE Energy News

Speaking in the Parliament, Croatian Prime Minister answered some questions regarding the buyout of shares of oil company INA held by Hungarian MOL, a process that was announced in late 206, but has still not been concluded.

PM Plenkovic said that the Government performed due diligence procedure for MOL’s stake in INA and determined its value. The Croatian side offered the price to MOL, but the Hungarian company did not accept the offered price. He said that the Government will not pay the price MOL is asking for its stake, so basically the negotiations have reached a dead end in late 2021.

In late 2021, the Croatian Supreme Court reached the final verdict that former Prime Minister Ivo Sanader is guilty of taking bribes from MOL CEO Zsolt Hernadi during the privatization of INA. In these changed circumstances the Government decided to put on hold the process of potential buyback of the shares that MOL is holding in INA until the new legal situation gets resolved.

Therefore, the Government decided to seek a review of the December 2016 ruling in favor of MOL by the Arbitral Tribunal of the United Nations Commission on International Trade Law (UNCITRAL) in a case that Croatia had brought against the Hungarian oil and gas company. The Government would seek an annulment of amendments to the agreement on relations between the shareholders in INA and a master agreement on the gas business, both signed in 2009, which Croatia argues were obtained through bribery.

In late 2016, Prime Minister Andrej Plenkovic announced the Government’s intentions to buy back the stake of Hungarian oil company MOL in Croatian oil company INA, adding that the best model for financing the buyout would be the initial public offering (IPO) of 25 % minus one share of state-owned power utility HEP, since Croatia will keep, with 75 % plus one share, all management rights in HEP without selling national resources. However, the HEP option seems to be scrapped in the meantime.

MOL is the single largest shareholder in INA with 49.1 % of shares, while the Croatian Government holds 44.8 %. The remaining 6.1 % is held by private and institutional shareholders.

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