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Mol wins Ina stake

HUNGARY'S MOL has won the race for a 25% stake plus one vote in the national oil and gas company, Ina, by offering $0.505bn - a sum considered excessive by analysts. Expectations were for a bid of around $360m. Mol also gains two seats on the company's seven-member board and is allowed to appoint the chief financial officer.

Austria's OMV, having posted an initial $420m bid, matched Mol's offer, but Zagreb took a negative view, deeming it a last-ditch, desperate flurry from the Hungarian firm's biggest regional rival.

Russia's Rosneft withdrew at the last minute.

The prime minister, Ivica Racan - also chairman of Ina's privatisation committee - brought the sell-off forward suddenly, wary of November's general elections and growing budgetary constraints. He suffered a rough ride in parliament before gaining cabinet approval for Mol's bid. The representatives of the four main opposition parties protested against the decision being taken without a full-scale parliamentary debate, amid concerns over protecting national interests.

Racan said Ina will gain diverse advantages through acquiring a trusted strategic partner. Mol's executive chairman, Zsolt Hernadi, described the privatisation as the most transparent he had experienced and emphasised dynamic regional synergies to be gained through Hungarian-Croatian-Slovakian co-operation - Mol bought a 70% stake in Slovakia's Slovnaft in November.

With Mol's help, Ina can become a regional player, which it would have been incapable of on its own, said the economics minister, Ljubo Jurcic. He predicted the country's energy market will function better as a result of the deal and that Ina's ambitious five- and 10-year goals may now be realised.

Ina produced 1.34m tonnes of crude and 1.8bn cubic metres of gas in 2002, and its refineries produced 5.03m tonnes of products (almost half of Mol's capacity). The company made a net profit of Euro114m ($131m) for the year.

Mol signed a Euro0.6bn revolving multi-currency loan contract with an international banking consortium - led by BNP Paribas, ING Bank and JP Morgan Chase to finance the acquisition - as part of an Euro0.75bn loan package to be finalised this summer.

Gyorgy Mosonyi, chief executive, said Ina will not sell another major stake to another party, but that he wholeheartedly supported a stock-exchange flotation. Mol is interested in increasing its holding.

The state intends to retain only a single golden share in Ina when Croatia joins the European Union (EU). It applied for membership in February and hopes to join by 2007.

Mol's commitments to Ina are considerable. It plans to upgrade the company's outdated refineries to EU standards - at a projected cost of $1.5bn, according to Mosonyi - and supply them with crude. In return, Mol gains equity in a long-coveted coastal refinery and sales access to the Balkans, whose countries are under-developed, but have high growth potential.

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