The new centre-right, and slightly nationalist-tinged, government in Hungary said it's prepared to step up efforts to end the stand-off between Mol Group and the murky Russian oil concern Surgutneftegaz, which owns a 21% stake in Hungary's energy champion.
Emboldened by the two-thirds majority his Fidesz party received in the general elections at the end of April, the incoming prime minister, Viktor Orban, said the current situation where Mol finds itself battling over the stake that Surgutneftegaz surreptitiously acquired from Austria's OMV in March 2009 doesn't serve the interests of "Mol, the Russian company with an unpronounceable name, or the two nations."
Asked whether the government would buy out Surgutneftegaz's stake, Orban obliquely responded by saying the new government would strive to protect the country's strategically important companies, of which Mol is considered the main one. So much so, in fact, that the previous Socialist government actually formulated in 2007 a strategic companies law, dubbed "Lex Mol", that investors and the EU complained was designed purely to protect the oil company from what was effectively a hostile takeover by OMV. As part of that attempt, OMV built up the 21% stake that it then sold on to Surgutneftegaz when it became clear the merger wouldn't go through.
However, Orban takes over an economy whose finances are in a mess and hasn't anything like the €1.4bn that Surgutneftegaz paid OMV for those shares. The government is already battling to keep the budget deficit down to a level that satisfies the International Monetary Fund and others, which lent Hungary €20bn in the depths of the crisis to keep the country afloat.
An outline of the deal, say analysts, could involve Surgutneftegaz remaining a financial investor, but not a strategic investor, through its 21% stake. "This would imply Surgut earning profit and voting in shareholders' meetings - in accordance with the 10% voting cap - but not participating in strategic decisions or in management," says Vladimir Socor of the conservative think-tank The Jamestown Foundation.
In a conciliatory gesture, Mol invited an observer from Surgutneftegaz to sit in on the 29 April annual general meeting (AGM), to which the Russian oil firm was barred for the second year in a row. Hungary's financial and energy regulators are preventing Surgutneftegaz from joining Mol's shareholders' register and taking up its voting rights and representation on the board until the company lays out its ownership structure and the circumstances of its acquisition of the 21% stake in Mol.
Surgutneftegaz appears unwilling to do that. It is murky even by Russian standards; the only known shareholder being the Bank of New York, which holds more than 5% and so under Russian law must declare its holding, while its top management enjoy cosy relations with Prime Minister Vladimir Putin's closest associates. One of those, Vladimir Bogdanov, Surgutneftegaz's chief executive, agreed to a rare interview with the Financial Times a day before the AGM in which he denied the Russian firm wanted to take over Mol and suggested a partnership whereby Surgutneftegaz would use some of Mol's oil-refining capacities located on EU territory.
Bogdanov said he expected Surgutneftegaz would eventually be able to reach an agreement on co-operation with Mol. "There is a Russian proverb: water cuts stone, as time goes on," he was quoted as saying.
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