We Want to Find a Solution for INA, Otherwise Possible Legal Actions

The Hungarian company MOL confirmed today that it sent a letter to the Croatian Government at the end of July stating that it remains committed to cooperating with the Government to find a joint solution regarding investments in INA, and if unsuccessful, it is prepared to initiate legal actions.

“We hope that the Croatian Government is committed, as we are, to meet and discuss the future direction of INA. While it is clear that jointly finding an acceptable solution is in the best interest of all shareholders in INA, MOL acknowledges that it must also protect its own shareholders, and as a publicly listed company, it has a legal obligation to continue negotiations in good faith, and if that fails, to initiate the most appropriate legal actions,” MOL stated in its response.

MOL also confirms that it has instructed its negotiating team regarding its investments in INA.

According to today’s Jutarnji list, MOL warned in its letter to the Government and the Ministry of Economy that it is ready to seek compensation of two billion kuna because the state did not take over INA’s gas business, which it committed to do in 2009.

The issue of separating the gas business from INA will be an integral part of the upcoming negotiations with Hungarian MOL, said Mladen Pejnović, director of the State Office for State Property Management (DUUDI), today.

“This is nothing new,” said Pejnović, who, along with Minister of Economy Ivan Vrdoljak, is a member of the Government’s negotiating team with MOL, which is expected to start on September 18.

He emphasized that the Main Contract on the gas business from 2009, which provided for the separation of INA’s company Natural Gas, is a serious matter.

“We know that lower gas prices for the population were largely compensated during one period. This is a serious obligation under that contract. On the other hand, we believe that the so-called Russian formula was not the smartest, as at that time the gas business was developing, and today prices in the European market and in our surroundings are – Russian formula minus 20 percent. That situation will be the subject of negotiations,” Pejnović said.

In August, when appointing the negotiating team with MOL, the Government stated that it is dissatisfied that the total production of oil and gas in Croatia is in constant decline. It also warned of the decline in refining at INA’s refineries, the drop in investments from about 3.1 billion kuna in 2009 to 1.28 billion kuna last year, the decline in last year’s profits, etc.

Because of all this, it is evident that there are problems in managing INA and that there are reasons for urgently re-evaluating the existing management model from 2009, and the necessity of opening negotiations aimed at establishing a new model based on equal relationships according to the size of the shareholdings of individual shareholders, the Government stated in the negotiation framework.

MOL holds 49.08 percent in INA, while the Croatian state holds 44.84 percent of the shares.