Government Looking for New Investor in INA

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MOL is ready to sell its share in the Croatian national oil company.

At the government’s session on Thursday, the first step towards break up with MOL with regards to INA has been taken. An investment adviser will be selected for the possible purchase of stocks held by MOL in the Croatian national oil company. The Prime Minister spoke about this idea late last year, when it was planned for the state itself to repurchase the 49-percent stake in INA by a partial privatisation of Croatian Electric Company (HEP), reports Večernji List on August 25, 2017.

Now the plan has changed. The privatisation of HEP has been agreed in principle, but the proceeds will be used for other purposes, although, due to worse than expected business results this year, it seems that HEP’s privatisation will also be delayed. And it is clear that the repurchase of MOL’s share in INA will not be speedy as well.

The selected advisor should find the money to buy MOL’s share or work on the search for a new strategic partner. According to reports, the state is in no way interested in maintaining the share but wants to find an investor which will, unlike MOL, have the goal of investing in oil exploration. But, the problem is that for now there is no interest for MOL’s share, and an even bigger question is how much will MOL ask for its shares. It is only known that MOL is ready to sell it, which they confirmed last year, and that they want to sell the whole package at once. A few years ago, Russian investors showed interested in buying the MOL’s share, but this year, when it was announced that a new investor would be sought, there was no interest by major investors.

At present, due to low oil prices, oil exploration is not in focus, but when the prices rise, and this is likely to happen soon, this business segment will again become important. And INA is in an excellent position, concerning possible oil deals in Syria and Iran.

One possible source of funds for investment in INA are Croatian emigrants who have reportedly expressed their interest. But, whoever agrees to buy MOL’s shares, they will be ready to pay just a fair price and no more than that. It is believed that INA is worth about 2 billion dollars, and the reasons are delays in the modernisation of refineries in Sisak and Rijeka, a fall in oil and gas reserves and the number of gas stations.

According to this calculation, the state would not be prepared to give MOL more than 900 million dollars. But, late last year it was reported that MOL was seeking about 1.8 billion dollars for the shares.

Translated from Večernji List.

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