Equity
ANALYST VIEW - ING sees MOL upping INA stake by 21%, finding ties in Russia
“In our view MOL is cheap in absolute and relative terms as well, however, we believe, this is not enough for the shares to outperform, the market needs a strong investment story and catalysts to change the tide."
ING added that positive acquisition news flow was going to be the catalyst in the coming months.
“[...] it is likely that MOL will be able to acquire further 21% of the Croatian oil company, INA and we expect MOL to find at least one joint venture opportunity in Russia."
MOL currently owns 25% of INA.
The Croatian government has signed the agreement with the advisors, who have 30 days to make a proposal for privatisation of INA. There is a privatisation law that says that 15% of INA should be listed, 25% should be kept at least until EU entry, 7% should be given to war veterans, and 7% should be given to employees. The remaining 21% is the stake, which MOL would have a chance to acquire.
“[...] the IPO could happen in 4Q, but MOL may go ahead with acquiring the 21% stake ahead of the listing, which would allow the Croats to realise a higher IPO price. We felt that management was also more confident about these prospects than before," ING said.
ING said there were also huge synergies that can be realised through reorganisation and optimisation of the company. An upgrade programme has already started, and "by 2009, MOL should have access to the Mediterranean, which is short of middle distillates and lacks significant ongoing expansions, offering MOL a niche."
The bank said an agreement to boost the INA package may be reached in Q2 or Q3.
ING added that positive acquisition news flow was going to be the catalyst in the coming months.
“[...] it is likely that MOL will be able to acquire further 21% of the Croatian oil company, INA and we expect MOL to find at least one joint venture opportunity in Russia."
MOL currently owns 25% of INA.
The Croatian government has signed the agreement with the advisors, who have 30 days to make a proposal for privatisation of INA. There is a privatisation law that says that 15% of INA should be listed, 25% should be kept at least until EU entry, 7% should be given to war veterans, and 7% should be given to employees. The remaining 21% is the stake, which MOL would have a chance to acquire.
“[...] the IPO could happen in 4Q, but MOL may go ahead with acquiring the 21% stake ahead of the listing, which would allow the Croats to realise a higher IPO price. We felt that management was also more confident about these prospects than before," ING said.
ING said there were also huge synergies that can be realised through reorganisation and optimisation of the company. An upgrade programme has already started, and "by 2009, MOL should have access to the Mediterranean, which is short of middle distillates and lacks significant ongoing expansions, offering MOL a niche."
The bank said an agreement to boost the INA package may be reached in Q2 or Q3.
