"Croatian oil group INA is to tap the market with EUR 200 million worth of convertible bond, half of which to be subscribed by Hungary’s MOL and the other half by the Croatian state and institutional investors, Bloomberg reported on Tuesday, citing local press reports.Croatia’s Finance Minister Ivan Suker said the bond issue could take place as early as March and the duration of the instrument will be either four or five years, and will become convertible to INA stock after 18 months.
Half of the EUR 200 m issue would be subscribed by MOL that holds a 47.2% stake in INA. Considering the size of the package (8% of INA’s market capitalisation), MOL could, in theory, gain majority control of INA after the conversion, but only if the state approves.
A Croatian daily has recently reported, citing government sources, that INA was likely to issue a EUR 200 million (USD 286.4 m) bond. The funds are to be used to clear the company's tax debt to the state and finance its operations.
At the end of 2009, MOL has already granted a USD 200 m loan to INA so that it could repay its debt.
Portfolio.hu viewpoint:
The report basically holds no novelty, given the recent news about a convertible bond issue. The only issue that remains open is whether MOL could increase its control to over 50% in INA or not. However, MOL already fully consolidates INA’s numbers and that will not change even if it becomes a majority owner in the company."
Source: Portfolio Online Financial Journal
19.01.2010