December 28 (SeeNews) - The shares of Croatian oil and gas company INA [ZSE:INA-R-A] rose sharply by 9.4% on the Zagreb stock exchange (ZSE) on Tuesday, following news that the government plans to regain ownership of the company by buying back the whole stake held by Hungarian energy group MOL.
INA's shares closed at 3,199.59 kuna ($443.1/424.1 euro) on Tuesday, up nearly 10% from Friday's close, after prime minister Andrej Plenkovic announced over the weekend that the government has decided to regain ownership.
The Zagreb bourse was closed on Monday due to a public holiday.
Local media are speculating that, based on the company's current market capitalisation, the government will have to pay MOL up to 16 billion kuna for its 49.08% stake in INA. Croatia's government currently controls 44.84% of INA, while institutional and private investors hold 6.08%.
Although neither MOL nor the government hold a majority stake, the Hungarian company was given managerial control under a deal concluded in 2009 with former Croatian prime minister Ivo Sanader.
The government's decision to regain ownership of INA comes after it emerged that MOL has won an arbitration case which Croatia launched against the company before the arbitral tribunal of the United Nations Commission on International Trade Law (UNCITRAL).
In 2014, Croatia filed for international arbitration against MOL with the aim to cancel the 2009 deal that allowed MOL to take over INA's management. Last year, Croatia ordered a retrial of Sanader who was earlier convicted for taking a bribe from MOL to allow it to acquire a dominant stake in INA.
"The arbitral tribunal has ruled that the evidence is not sufficient to prove that the agreements signed in 2009 are the result of corrupt activities and it has refused to nullify them," Plenkovic was quoted as saying in a statement released by the government on Christmas Eve.
Plenkovic added that Croatia will initiate a buyout of MOL's entire stake in INA under a model it has already worked out, which is financially sustainable and which won't increase Croatia's public debt. However, according to local media reports, this is close to impossible given the price of INA's shares.
The International Centre for Settlement of Investment Disputes in Washington is expected to also rule on the matter of INA next year.
(1 euro= 7.54491 kuna)