MOL plans spin-off, sale of gas unit

Hungarian oil and gas group MOL Rt said on Friday it will make preparations for a spin-off of its gas business and will start talks with investors about its possible sale.

“MOL will start preparations for a process that is fully in line with EU regulation, with the best European practice, namely the separation of the individual units of its gas business from the parent company and from each other,” Zsolt Hernadi, the group’s new chairman, told journalists after a board meeting where he was elected to the post. Hernadi replaces Janos Csak, who resigned in the aftermath of a row between MOL and the government over the controversial natural gas price rise as of July 1. Hernadi said the preparation for the spin-off has started, but it needs a decision by the shareholders’ meeting, which could be called early autumn. He added that MOL’s board had authorised the management to start talks with potential investors, including the government, about the possibility of selling off the gas business. The board had also examined the government’s intention that it would be willing to buy MOL’s gas business, Hernadi said. “The board recognised this intention and authorised MOL’s management to start talks that in any form could have a positive influence on the future of the gas business,” Hernadi said. “MOL…will examine every offer that is reasonable and useful for shareholders,” he added.

The company said it would make losses of up to 100 billion forints on its gas business due to a government-imposed rate hike cap, but the cabinet said this projection was exaggerated. Hernadi said the company maintained this earlier estimate. The government capped this year’s rise in natural gas prices, just as other centrally-controlled prices, at six percent in an effort to curb inflation and avoid social tension. Reuters