Hungary Seeks Surgut's Mol Stake, May Finance From Market, Fellegi Says

http://www.bloomberg.com/news/2010-10-21/hungary-seeks-surgut-s-mol-stake-may-finance-from-market-fellegi-says.html

Hungary wants to buy OAO Surgutneftegaz’s stake in central Europe’s largest refiner Mol Nyrt. by the end of the year and may finance the purchase from the market, National Development Minister Tamas Fellegi said.

The government is interested in the 21.2 percent stake, worth 460 billion forint ($2.3 billion) at yesterday’s closing price, as it “doesn’t welcome” a large foreign shareholder in strategic domestic companies, Fellegi said in an interview in Budapest yesterday.

“We believe it would be beneficial for the state if it could become a shareholder in Mol” through the purchase of the stake held by Surgutneftegaz, he said. Hungary may finance the transaction from the market “based on the preliminary feedback we’ve received. I’m not worried about raising the necessary funds, should the government wish to.”

Siberia-based Surgut purchased the Mol stake from Austria’s OMV AG for 1.4 billion euros ($2 billion) in March 2009 after the Hungarian refiner fended off OMV’s hostile takeover attempt.

Mol and the Hungarian government said Surgut’s acquisition was also a hostile takeover attempt. The Russian company has been barred from exercising its ownership rights as its holding hasn’t yet been registered into Mol’s books.

Mol’s share price has more than doubled since March 30, 2009, when Surgut announced its purchase of the stake. The stock gained 24 percent this year, compared with an 11.2 percent advance in the 13-member benchmark BUX index.

‘Range of Issues’

The Mol stake is one of a “range of issues in the area of energy cooperation” with Russia and the government wants to reach an agreement encompassing these by the end of the year, Fellegi said. Other topics include long-term natural-gas agreements that expire in 2015 and gas projects such as South Stream, Fellegi said.

Hungary, which relies on imports for about 80 percent of its natural gas consumption, is also seeking new supply sources and transport routes to “abolish its one-sided energy dependence,” on Russia, Fellegi said this month. The country supports the European Union’s Nabucco, Russia’s South Stream natural gas pipeline projects and the AGRI liquefied natural gas venture with Romania, Georgia and Azerbaijan.

‘Energy Cooperation Package’

“It’s the ambition of both the Russian and the Hungarian parties to reach an agreement on this energy cooperation package by the end of the year,” he said.