Croatia’s environment and energy Minister Tomislav Ćorić announced that the country expects to start talks with Hungary’s MOL on a possible buyback of shares in Croatian oil and gas company INA by the end of June.
“The Council for INA today received the first preliminary report on due diligence from our consultant, Lazard,” said Mr Ćorić adding that the final report is expected within a month.
“What follows is intense communication with the other party and in that context, we expect the first meeting with MOL by the end of the month,” the Croatian Minister for Environment and Energy told reporters after a meeting of the Council for INA chaired by Prime Minister Andrej Plenković.
Mr Ćorić did not reveal details of the report, citing that INA was listed on the stock exchange and that this “narrowed the government’s manoeuvring space.” However, he noted they were pleased with the work done.
In 2008, MOL became the largest shareholder in INA by acquiring 49.1 per cent of shares and subsequently obtaining the management control rights over the company. The Croatian government holds 44.8 per cent of shares.
The two sides have long been at odds with each other. In 2011, Croatia’s anti-corruption office, USKOK suspected that Croatian ex-prime minister Ivo Sander had taken bribes so that MOL could obtain management rights. However, Zagreb lost an arbitration process against MOL over this issue before the UN Commission on International Trade Law, (UNCITRAL) in 2016.
Following the ruling of the international arbitration tribunal, Croatian Prime Minister Andrej Plenkovic announced at an extraordinary press conference that the Croatian state will buy out MOL’s stake in INA.
In 2017 a government advisory body, the Council for INA was established with the task of providing guidance and proposing measures and decisions for the preparation, implementation and financing of the possible buyback of MOL’s stakes.
The Croatian government selected the Anglo-French investment bank, Lazard, as a consultant in August 2019 to complete its due diligence on INA for 9 million euros. Initially, the government wanted to see the final report ready in the first quarter of 2020 to start talks with MOL.
Prime Minister Andrej Plenkovic told the press that he would not shy away from repurchasing INA and had high hopes for Lazard’s report, which he said will form the basis of the talks.
Croatia will hold preliminary elections on July 5, and the MOL-INA case is expected to once again become major a campaign issue.