A session of the Council for the INA oil company was held today at which a new consultant was chosen for the purchase of INA shares from the Hungarian MOL oil company.
After Prime Minister Andrej Plenković announced on Christmas Eve in 2016 the government decision to return INA to Croatian ownership and after the government chose a consortium of banks as their consultant in the purchase of the shares last spring, with whom it recently halted cooperation, the Council for INA met today to decide on a new consultant.
Following the session Finance Minister Zdravko Marić announced that the Lazard English-French investment bank will be the new government consultant for the purchase of INA shares from the Hungarian MOL oil company.
Marić recalled that a consultant had previously been chosen, a consortium consisting of Morgan Stanley, the Intesa Sanpaolo group and the Privredna Bank in Zagreb, however certain discrepancies appeared regarding the understanding of what needed to be incorporated into the contract on representation, primarily technical aspects for engagement of consultants themselves.
Marić said that they decided to correct the entire process. "We renewed talks with the others from the inner circle that we spoke with in the first round. We decided upon the Lazard investment bank," said Marić.
Minister of Environmental Protection and Energy Tomsilav Ćorić noted that the entire story will be put into procedure at the government cabinet session on Thursday.
"The situation from a year ago was avoided. There will be no problems here. As far as financial effects for the republic of Croatia or the budget are concerned, the contracted was determined in several phases. In the end the sums remained more or less the same and everything can cost around 9 million euros," said Minister Ćorić.
As far as due diligence is concerned, Ćorić believes that the other side can do so in six months from the signing of the contract.
"Allow this to take a day more or a day less. We want to complete this portion of the process during the first quarter of 2020 and come before the other side with our offer to purchase the shares. The contract with the new consultants will be signed in the next few days. Besides a loss of time, there is no loss of money. This time we worked differently, every detail was agreed upon," noted Minister Marić.
Prime Minister Andrej Plenković had earlier pointed out that halting cooperation with the previous consultants headed by the Morgan Stanley investment bank will have no financial consequences. He believes that the purchase process can be completed by the end of this government's mandate.
As for a possible package, or the possibility that an agreement on purchase of INA shares is made with the Hungarians in parallel to an agreement on the deal concerning the LNG terminal on the island of Krk, Minister Ćorić said that these are two separate things.
"One is an agreement with a mainly private company, while we are agreeing on the LNG deal with the Hungarian state. There is a Hungarian offer on the table to purchase 25% of shares in the LNG terminal. On the other hand we want them to consider leasing capacities at the LNG terminal in Croatia,” said Ćorić.
Asked where money will come from to purchase MOL's share in INA, Finance Minister Marić said that currently there is no money in the budget for this and that results of consultations should be seen first. He did not exclude the possibility of choosing a new strategic partner to take MOL's place.
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