Croatia May Seek Alternative Financing to Buy INA Stake from MOL -Agency

BUDAPEST--Croatia may seek alternative ways to finance the purchase of Hungarian oil and gas company MOL Nyrt.'s (MOL.BU) stake in Croatian subsidiary INA d.d. (INA.ZG), the Hungarian news agency reported Monday citing Croatian newswire HINA.

The Croatian government spokesman wasn't immediately available to comment.

The Croatian government intends to consider exercising its pre-emption rights for MOL's stake, HINA quoted Croatian Economy Minister Ivan Vrdoljak as saying on Monday.

His comments contradict those of Croatian Prime Minister Zoran Milanovic at the weekend who said that a state purchase of the shares would be "business adventurism" given the country's lack of financial resources. Mr. Vrdoljak said the state may be able to afford the purchase.

"We'll do everything in our power; talk, seek a model that would enable us to buy those shares. If we manage to do so, great; if not, we'll say thanks but we're not in a position to buy them right now," HINA quoted Mr. Vrdoljak as saying.

MOL said in a stock exchange filing that its board has given the green light for preparations to sell its 49.1%, managing stake in INA. The announcement followed talks about INA in the Croatian capital Zagreb Friday, with negotiators from the Croatian government.

Croatia holds 44.84% of INA shares.

MOL, in which the Hungarian government is the single largest shareholder with a 24.6% stake, is in talks with Croatia about INA amid an intensifying diplomatic spat after a Croatian court issued an arrest warrant for MOL Chief Executive Zsolt Hernadi, related to a bribery case in which former Croatian Prime Minister Ivo Sanader was convicted.

MOL closed Monday's trading down 2.9% on the news that the management is preparing for the option to sell its INA stake, at HUF14,270.

Write to Veronika Gulyas at [e-mail]