MOL’s share in INA will probably be bought by partial privatization of Croatian Electrical Company (HEP).
Croatian Prime Minister Andrej Plenković said in an interview for Nova TV that his government was the first to sit down and talk with the INA management and that the government was responsible in its behaviour towards the national oil company. He added that the acquisition of MOL’s share of INA could be financed by the initial public offering of Croatian Electrical Company (HEP), reports dnevnik.hr on December 31, 2016.
He was asked why the government would buy INA after losing arbitration proceedings. “The situation with INA as a national strategic oil company has been problematic for many years. We have a situation where there is one arbitration procedure, another one has just ended, there are numerous court cases, and there are also business relations with the Hungarian MOL. This government has taken responsibility for Croatia on 19 October”, said Plenković. He stressed that it is was a responsible behaviour by the government towards one of key national companies with more than 10,000 employees, two oil refineries and a large retail network. “What is important is that we are the first government to have sat at the table with the INA management. Something like that has not happened for many years”, he added. “We believe that, in the circumstances, this is the best move with regards to the energy security and supply of Croatia”, he concluded.
When asked whether this meant that the government had enough money to buy MOL’s share of INA, the Prime Minister said that it was first necessary to do a thorough assessment of the value of INA. He added that at the moment he only had certain internal assessments. “I do not want to speculate on INA’s value”, he said.
The model which we are considering is the initial public offering of shares of HEP, “which would include a limited number of shares”, said Plenković. Asked whether it was “25 percent plus one share”, he said it was “25 percent minus one share” of HEP. “I think this is the best solution. In this way, we would raise funds from potential investors, small shareholders, pension funds”, said Plenković. I am sure, he added, “that we would find enough money to buy MOL’s share in INA. We would do it without increasing public debt, and we would have in our portfolio two key energy companies.”
“We are not going to divide HEP. We will adopt a new legal framework that will enable us do to this, with a broad political consensus, not only of stakeholders in the current government, but also of other political parties”, he said, adding that the majority of responsible political actors supported this approach.
Plenković rejected a comment that the government, by announcing its intentions, had in reality said to MOL, “we will buy INA at any price”. “Do you really think that we would make such a decision during one afternoon”, replied Plenković, adding that INA was one of the biggest political, economic, and financial issues in Croatia.