MOL Angers Croatia with INA Dividend Demand

Hungarian oil and gas group MOL has demanded a dividend payment from partly-owned Croatian affiliate INA, provoking an angry response from Zagreb in their ownership feud over Croatia's national oil company.

 

MOL said in a statement on Tuesday it had asked INA to call a meeting of shareholders to approve the payment of a special dividend of 260 million euros ($324 million) from retained profits made in the last few years.

 

The two main shareholders have long been at odds over the management of INA. Zagreb says MOL should not have been given a dominant role in INA, after increasing its initial 25 percent stake, bought in 2003, to 49.1 percent in 2009, in a deal approved by Ivo Sanader, the now disgraced former prime minister.

 

The Croatian state owns 44.84 percent of INA, which employs 13,000 people, and regards the company as being of strategic national interest.

 

MOL has said it is now prepared to sell its stake if a settlement over how the company is run is not reached relatively soon. However, talks which started last year have made little progress so far.

 

MOL said it had stabilised INA's finances and turned it into a profitable company since 2003 but the Croatian economy ministry's latest decisions to revoke some onshore exploration licences showed it was not supporting investments.

 

"Therefore, the time has come now for all shareholders to realise a return of their previous investments," MOL said.

 

The statement was released shortly before a meeting between MOL, the Zagreb government and INA's management, aimed at discussing what to do with INA's two ageing refineries, both in need of investments which MOL said are not worthwhile.

 

MOL's proposal to close one refinery was rejected by Croatia earlier this year.

 

Ivan Vrdoljak, Croatia's economy minister and chief negotiator in the talks on INA's future that started in September last year, dismissed the demand for dividends.

 

"The reasoning that this (dividend demand) is because of the revoked licences is not valid. The government, the prime minister and finance minister, we will decide what to do," Vrdoljak said.

 

INA's management board must now convene and discuss MOL's demand for a shareholders meeting but its Croatian members could refuse to vote to frustrate the process, as they did twice this year when the refineries were being discussed.