Mol, the Hungarian oil and gas group, offered what appears to be an olive branch to Croatia on Thursday in the ongoing row over the control of Ina, the Zagreb-based refiner in which Mol owns just short of 50 per cent.
While laying out a long list of complaints against what it termed the “vast number of unjustified actions” by the Croatian authorities, Mol said it would consult with the Croatian government and still considers the Croatian state a potential buyer of its stake in Ina “if there might be any decision about the possible selling of Ina shares.”
And if that sounds like an awful lot of conditionals in one sentence, it is probably for good reason: nobody thinks Mol really wants to sell its stake in Ina – this despite the Hungarian government’s instruction to Mol on Wednesday to “review the company’s portfolio and, if appropriate, prepare the sale of the Ina shares currently in Mol’s possession to the Croatian Government, or to a third party.
In essence, it’s all about posturing, says Peter Szentirmai, equity analyst with KBC Securities.
“I would be surprised if Mol eventually sold its Ina stake. I still believe it’s about showing that if the Croats have their means to strengthen the government’s position in the negotiations over Ina management rights, then Mol also has its means, and also state support,” Szentirmai told beyondbrics.
The means – on the Croatian side – is the decision by Zagreb law enforcement authorities this week to issue a European Arrest Warrant (EAW) against Zsolt Hernadi, Mol’s executive chairman.
The Croatians have been seeking to interview Hernadi in connection with a corruption investigation relating to Mol’s 2009 acquisition of control over Ina. When he failed to attend an investigative hearing last week in Zagreb, the Croatian side began procedures to issue the arrest warrant.
But both Hernadi and Mol have consistently denied any wrongdoing, and a Hungarian police investigation into the matter concluded there was no evidence of any crime.
Mol stressed in Thursday’s statement that it is continually evaluating its strategic holdings, including shares in Ina, based on a “rigorous approach … ensuring that shareholders’ and stakeholders’ value is maximized,” and that it will “reconsider the nature of any future involvement with Ina in the near future.”
But while indicating a willingness to respect Croatian sensibilities and avoid any further escalation of the row, Mol argues that the Zagreb government no longer holds the pre-emption right on its Ina shares spelled out by the deals signed in 2009 [when Mol took control of Ina] “due to prior violation of these contracts.”
Mol gave no further details of these alleged violations.
In yet another twist to the story, Szentirmai, in a note to investors on Thursday, pointed out that Croatian daily Vecernji List had quoted the spokeswoman of Zoran Milanovic, the Croatian prime minister, as saying that reports that the government would buy back Ina shares were “wishful thinking.˝
With its Thursday statement, Mol is presumably hoping for a conciliatory response from the Croatian side, although that may take time, if it comes at all.
Meanwhile, the uncertainty is not doing any good for Mol’s shareholders – stocks in Hungary’s dominant energy company closed at Ft 15,405 on Thursday. While something of a recovery from the intra-day low of Ft 15,190 in afternoon trading, Mol shares are still down 2.5 per cent on last Friday’s close.
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