Hungary Cuts State Guarantee for EON Unit's Purchase

Hungary cut its state guarantee for the purchase of EON SE’s local natural-gas businesses, according to a budget amendment lawmakers approved today.

The state will guarantee 80 percent of the price Magyar Villamos Muvek Zrt., Hungary’s state-owned electricity company, will pay for EON’s Hungarian gas trade and storage companies, according to the legislation, posted on Parliament’s website.

The guarantee is valid for as much as 256 billion forint ($1.12 billion), compared with the earlier pledge for as much as 875 million euros ($1.14 billion) plus an additional 90 billion forint for inventories. MVM will also have to pay a monthly fee of 0.12 percent of the 256 billion-forint guarantee, or 307 million forint, for the duration of the guarantee.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net