MOL Mulls Legal Moves Against Croatia over INA Gas - Report

By Veronika Gulyas

BUDAPEST--Hungarian oil and gas company MOL Nyrt. (MOL.BU) is considering taking legal action against the Croatian government over alleged losses stemming from a dispute over the country's failed takeover of local natural gas business INA d.d.'s (INA.ZG), Croatian daily Jutarnji List reports Thursday.

Under a privatization agreement signed with MOL, Croatia should have taken over INA's loss-making natural gas business in 2009, but the then government asked for a two-year delay. To date, the takeover hasn't happened.

MOL has allegedly suffered losses of 2 billion Croatian kuna ($353 million) because of the delay, Jutarnji List reports.

MOL currently owns a 49.1% stake in INA, while the Croatian government controls 44.8%, but MOL holds management rights, and Croatia has been seeking to change the shareholding agreement--in particular over management rights--between the two utilities.

MOL confirmed to The Wall Street Journal it sent a letter at the end of July to the Croatian government, saying the energy company had to protect the interests of its stakeholders by pursuing negotiations to resolve the shareholding issue, adding it wants to find a solution to the dispute with Croatia.

Should this not happen, however, MOL may start legal proceedings, the company said.

"MOL has instructed counsel in connection with its investments in [MOL subsidiary Croatian refiner] INA," MOL said in a emailed statement. MOL didn't comment about the alleged losses.

Attempts to obtain comment from the Croation government weren't immediately successful.

Newspaper website: www.jutarnji.hr

Write to Veronika Gulyas at [e-mail]

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