Handelsblatt sees Surgut seeking to trade influence in Hungary for INA stake

http://www.portfolio.hu/en/cikkek.tdp?k=1&i=18762

October 22, 2009, 8:45 am

"The next likely move in the CEE region’s energy sector is Surgut offering MOL a deal to move out of Hungary in return for a stake in INA", Germany’s leading financial daily Handelsblatt argued. In Portfolio.hu’s view, the article is based on several pieces of unconfirmed information.

Handelsblatt believes the region’s energy sector may soon see Russian hostile investor Surgutneftegaz trying to strike a deal with Hungary’s MOL to surrender its recently acquired 20% stake in return for MOL’s stake in Croatian peer INA. The author adds that the article is not based on specific information about Surgut’s strategic plans.

Were such an offer made, MOL would not have a really good option, the newspaper concluded, arguing that MOL would either lose its Croatian affiliate or face a double threat from Surgut looming on the horizon. On the one hand, Surgut may acquire the remaining 80% of MOL any day, on the other hand the Russian company could put MOL under pressure by entering into energy supply agreements with Croatia.

1. MOL has a 5-year moratorium on the sale of INA stocks (which may be reduced to 2 years as long as no stock swap takes place during this period). Moreover, the Croatian government has an option on the stake, thus Surgut would need more than MOL’s willingness to cooperate in order to acquire the latter’s 47% stake in INA.

2. Based on current stock market prices, the value of MOL’s 47% stake in INA is less than half of what Surgut’s 20% in MOL is worth, thus the Russian company would not necessarily benefit from the swap.

3. In Portfolio.hu’s opinion, Croatia is not quite so Russian-friendly as to strike a deal with a Russian investor that would harm INA, especially as the latter is still 45% state-owned.

4. It is not like Surgutneftegaz could acquire the remaining 80% of MOL stocks any day it wanted to. Based on publicly available information, MOL management controls 49% of the company, and it would be highly surprising for this strong position to suffer.