Mol to Consider Selling INA Stake Back to Croat Government

Mol Nyrt., Hungary’s largest refiner, said it may consider selling its INA Industrija Nafte d.d. stake back to Croatia after the Balkan country’s police issued an arrest warrant against Mol Chairman Zsolt Hernadi.

Mol would reconsider the “nature of any future involvement” with INA, Croatia’s $7.3 billion national refiner, soon, the Budapest-based company said in an e-mailed statement today. Its Adriatic neighbor would be considered as a potential buyer should a decision to sell be made, Mol said.

“MOL will consult with the Croatian government, which has already stated on many occasions about the intention of getting operational control,” the company said.

Croatia is seeking Hernadi’s arrest in connection with a corruption investigation related to a 2009 contract in which Mol won control over INA. Former Croatian Prime Minister Ivo Sanader, who presided over the deal, is serving a 10-year prison term after a court in Zagreb ruled he received a bribe from Mol. Locked in a dispute over INA since Sanader’s arrest in 2010, the two sides started talks on INA’s future last month.

Mol has repeatedly denied any wrongdoing, and Sanader is appealing the verdict.

Croatia will not comment on the situation until it receives something official from Mol, said Prime Minister Zoran Milanovic’s spokeswoman, Zinka Bardic.

It could potentially buy back Mol’s stake with “appropriate financial instruments and with the price adjusted from the current market-capitalization price,” said Davor Stern, the former head of INA’s supervisory board.

Shares Fall

Hungary’s government, Mol’s biggest shareholder, accused Zagreb of trying to intimidate Mol yesterday and urged the Hungarian company to consider selling its INA stake to Croatia or to a third party.

Mol shares briefly pared declines after the company’s statement today before falling again. They were down 2 percent by 4:31 p.m. in Budapest, a 16-month low on a closing basis.

“Mol isn’t very well positioned in this dispute,” Kamil Kliszcz, a Warsaw-based utilities analyst at BRE Bank SA brokerage, the Polish unit of Commerzbank AG, said by phone today before Mol’s statement was published. The biggest risk is that it would be forced to sell at a lower price than what the market has discounted, he said.

Milanovic today said he hopes talks with Mol will continue and the arrest warrant for Hernadi is part of a judicial procedure that precedes his government.

Should no deal be reached and Croatia’s “political statements and legal cases” continue, then there will be “nothing left to do other than selling the INA stake,” Hungarian Foreign Minister Janos Martonyi said in a HirTV interview yesterday.

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