ANALYST VIEW - OMV's goal with selling MOL shares is twofold, voting right angle less important - KBC

Austrian fuels group OMV has reduced its stake in Hungarian rival MOL by selling shares to UniCredit group under a repo agreement. OMV has transferred 10 million MOL shares to the HVB Group, and the repo will be settled on 29 January next year. KBC Securities OMV's aim behind the move can be twofold.


2008.09.26 08:49
OMV sells 10 m MOL shares, uses the Hungarian group´s own tactics against it

After the transaction OMV holds 12.2 million MOL shares, or 11.7% of voting rights, according to the statement of the company. OMV does not intend to permanently sell the shares and signed the agreement to "optimize its capital structure", said company spokesman Thomas Huemer.

"OMV's aim behind the move can be twofold. On one hand it optimizes capital structure as part of its MOL shares can now be part of its working capital. On the other hand, it also "optimizes" voting rights in MOL, what was limited earlier by the 10% voting cap regulation of the company," commented Péter Tordai, analyst at KBC Securities in Budapest.

He believes, however, that capital optimization is far more important.

Tordai noted that OMV has significant investment plans in Turkey: it aims to build a power plant (EUR 350 m), it hopes to agree on Petrol Ofisi with Dogan Holding (some EUR 1.4 bn) and to build a refinery (up to EUR 5-8 bn).

"With these plans fresh money is pretty important for OMV, who was widely criticized by investors why it does not sell MOL shares for funding its investment plans. The repo agreement is a good tool to prove the market that investment in MOL is not fully a dead money," Tordai concluded.