ZAGREB, July 17 (Hina) - The Croatian government unanimously decided on Thursday to sell 25 percent plus one share of the INA oil company to the Hungarian MOL company for US$505 million.
ZAGREB, July 17 (Hina) - The Croatian government unanimously
decided on Thursday to sell 25 percent plus one share of the INA oil
company to the Hungarian MOL company for US$505 million. #L#
The government said it was in favour of disclosing all documents
relating to the sale and would urgently seek permission for that
from the Hungarian partner.
Ministers said the privatisation of INA, the government's biggest
venture of this kind, was concluded according to the law,
professionally and to INA's benefit. They dismissed the
opposition's objections to the deal.
Prime Minister Ivica Racan labelled the objections as "grave
imputations" which were aimed at accusing the government a few
months before elections and, at all costs, preventing it from doing
something good, even through imputations.
The PM said the opposition's claims that it had "reliable sources"
saying that two secret contracts had already been signed were an
example of such imputations. He also dismissed bids to invalidate
the tender for the privatisation of INA and to accept offers which
arrived after the tender was closed or which were submitted by
individuals willing to buy INA with suspicious capital. "The
government will not and cannot yield to such pressures."
Government members were agreed the decision to sell 25 percent plus
one INA share is for the benefit of INA as a Croatian company
aspiring to becoming stronger and a regional player. They recalled
that in 2000, INA's losses stood at US$200 million and its assets
were worth $700 million, while INA was a desirable partner today,
when one-fourth of its shares is worth what the entire company was
worth a few years ago.
The 3.3 billion kuna Croatia will get for the 25 percent interest in
INA, which is 800 million more than envisaged in the state budget,
will help Croatia defuse the pressure of indebtedness, said Finance
Minister Mato Crkvenac.
MOL has 60 days to pay the US$505 million for the INA shares but
Economy Minister Ljubo Jurcic expects the Hungarian company will do
so within a month.
Jurcic said the stockholders agreement gave MOL certain management
rights. To make certain decisions, the INA Managing Board needs the
consent of the Supervisory Board, which decides with six out of
seven votes -- five of which are the government's and two are
MOL's.
The consent is necessary, for example, in deciding on the annual
budget, approving or changing the business plan, reviewing any
right over real estate, capital assets or claims, or in deciding on
the issuing of guarantees for amounts exceeding 80 million kuna or
when the annual resource management exceeds 200 million kuna.
The stockholders agreement stipulates there will be no layoffs for
three years, that both INA refineries will be kept operative, and
that Croatian law will be applied in adjuticating the stockholders
agreement and the cooperation agreement.
In negotiating the INA privatisation, three documents were
formulated -- an agreement on the sale of shares, a stockholders
agreement, which is signed by the government and the strategic
partner, and a cooperation agreement, which is signed by INA and the
strategic partner.
Jurcic said 10 basic issues were agreed on and included in the
documents. Potential partners were invited to submit final binding
offers under identical terms and rights, as stipulated in an
agreement for all bidders.
Offers were submitted by Hungary's MOL, which offered $505 million,
and Austria's OMV, which offered $420 million. Russia's Rosneft
gave up because it was not offered a guarantee to buy a majority
interest in INA.
The INA Privatisation Council recommended to the government to
accept the MOL offer because it was the best financially and because
it did not depart from the basic terms of the transaction agreements
in any significant way. As a result, the government today selected
MOL.
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