Citigroup Offering Triggers Biggest Mol Slump Since 2011

Photographer: Akos Stiller/Bloomberg

A worker passes pipelines and crude oil storage tanks at the Duna oil refinery operated by MOL Hungarian Oil and Gas Plc in Szazhalombatta, Hungary. Close

A worker passes pipelines and crude oil storage tanks at the Duna oil refinery operated... Read More

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Photographer: Akos Stiller/Bloomberg

A worker passes pipelines and crude oil storage tanks at the Duna oil refinery operated by MOL Hungarian Oil and Gas Plc in Szazhalombatta, Hungary.

Mol Nyrt., Hungary’s largest refiner, fell the most in more than two years as Citigroup Inc. conducted a sale of a 4 percent stake in the company on behalf of a shareholder whose identity hasn’t been revealed.

The shares fell 6.3 percent, the biggest plunge since November 2011, to 11,930 forint by the close in Budapest. The stock contributed to a 2 percent drop in the benchmark BUX index. Citigroup offered the shares in a range of 11,800 forint to 12,200 forint, valuing the stake at about $243 million, according to terms obtained by Bloomberg News yesterday.

Hungary’s government holds an almost 25 percent stake in Mol, making it the biggest owner. Crescent Petroleum Co. and Dana Gas PJSC (DANA) held 3 percent and 1.4 percent, respectively, after Dana sold a $135 million stake in Mol last year, according to data as of Dec. 31 in Mol’s annual report. The two United Arab Emirates-based companies are most likely to be the sellers in the Citigroup offering, according to MKB Bank Zrt. and KBC Groep NV.

“Probably a shareholder needed the cash,” Zsolt Balasy, a Budapest-based equities analyst at MKB, a unit of Bayerische Landesbank, said by phone today. The placement “will put pressure on the stock in the shorter term, as well as in the longer run,” Balasy said.

Dana Gas is “constantly reviewing” its position and cash balance, Robinder Singh, Sharjah-based investor relations director at Dana Gas, said by phone. “As part of that review we look at means to meet our cash requirements,” he said, declining to comment on any specific transactions.

Kurdish Payments

Dana Gas has been in arbitration with the Kurdish Regional Government in Iraq over payments. The gas producer was owed $583 million from the Kurdish region at the end of the first quarter. The company is also struggling to obtain payments from its operations in Egypt. It was owed $278 million from the most populous Arab nation at the end of March, according to first-quarter results.

Crescent Petroleum didn’t immediately return an e-mail sent to its public-relations representative. Mol declined to comment on the transaction citing “official capital market communication and reporting rules,” according to an e-mailed response to questions from Bloomberg today.

Shares in Mol, which also counts Czech utility CEZ AS and Oman Oil Company among its biggest foreign owners, dropped 18 percent this year, compared with a 0.3 percent decline in the BUX index.

Hungary’s Economy Ministry and state asset management company MNV didn’t respond to questions submitted by phone and e-mail yesterday and today.

“The suppressed price levels may provide good buying opportunities over time, but for now it’s worth staying away from the stock,” David Sandor, an analyst at KBC’s Equitas unit in Budapest, wrote in an e-mailed report on the placement today.

Four out of 17 analysts recommend buying the stock, nine say hold and four advise to sell, according to data compiled by Bloomberg.

To contact the reporters on this story: Andras Gergely in Budapest at agergely@bloomberg.net; Marton Eder in Budapest at meder4@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Stephen Kirkland

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