After yesterday’s sudden announcement that the government plans to buy back MOL’s share of INA, the Hungarian company has issued a short statement.
MOL has always been and remains open to discuss the future of INA. Given the statement made on Saturday evening by Croatian Prime Minister Andrej Plenković, about the intention of Croatian government to buy back MOL’s share of INA and once again return control over the national oil company, MOL is now waiting for official notification from the government, reports Večernji List on December 25, 2016.
That was the response of the Hungarian company to the Prime Minister’s statement. “We have made this political decision, and Hungarian side has been informed about it at the highest level. I personally did it this evening”, said Plenković on Saturday. He said that the government was informed that the decision had been made in the proceedings initiated by Croatia against MOL at the arbitral tribunal of the United Nations Commission on International Trade Law in Geneva.
In early 2014, Croatia filed an arbitration complaint against MOL asking the tribunal to declare void the changes to a contract between Croatia and MOL made in 2009 about the management rights in INA. Croatia also requested compensation for damages incurred as a result of the agreement, signed during the tenure of Prime Minister Ivo Sanader. However, the arbitral tribunal decided that the offered evidence was insufficient to prove that the contracts concluded in 2009 arose as a result of corruption, said Plenković. He noted that no Croatian court have yet made a final verdict which would prove there were corrupt activities which occurred in connection with the signing of the contract. There was one such verdict, but it was recently annulled by the Constitutional Court of Croatia.
Plenković said that the decision at the International Court for the Settlement of Investment Disputes in Washington would be made by the end of next year. That is the second dispute between Croatia and MOL, and was launched in 2013 by MOL against Croatia for “breach of obligations and procedures in connection with MOL’s investment in Croatia”. MOL believes that the government has not met its obligations from the agreement signed in 2009 and that it therefore suffered damages worth at least two billion kuna.
Plenković said that the government had already discussed the best options for the future of INA. “For us, INA is a strategic national company. Therefore, Croatia will start the process of buying back the entire MOL’s share of INA and we have already discussed the model how to do it, which will be financially viable and will not ultimately increase the public debt”, said Plenković.
Reacting to the Plenković’s statement, Speaker of Parliament and MOST president Božo Petrov said that the ruling parties had reached an agreement on future plans for INA and that MOST had always advocated for the protection of INA. “Prime Minister and I have together agreed on future plans for INA. The result of the arbitration is not favourable for Croatia, but we are going to purchase a majority stake in this strategic company”, said Petrov.
The largest opposition party SDP announced on Saturday night that it supported the government’s decision to return INA to Croatian ownership and urged the government to present the financial plan for it. Former Economy Minister and current HNS president Ivan Vrdoljak said that he would support the government’s decision. “I absolutely support this decision. I have already spoke about such idea in 2014 when I was a minister. Now I am in opposition, but I give support to the government to go in this direction”, said Vrdoljak. Vrdoljak said he could not estimate the current value of INA shares.
MOL has a 49.08 percent stake in INA, while Croatia owns 44.84 percent of shares. The latest transaction of INA shares at the Zagreb Stock Exchange was made at the price of 2,925 kuna per share, which means that the value of MOL’s stake in INA could reach about 14.5 billion kuna or about 2 billion dollars.