INA-MOL wants to increase ownership in Energopetrol, experts suggest government terminate contract

Representatives of the Croatian-Hungarian oil consortium INA – MOL inquired a few days ago with financial and legal consultants in Sarajevo about how they can increase their stake in Energopetrol by converting Energopetrol's obligations to the consortium into capital, Bosnia and Herzegovina's news agency Patria has learned.

- This means that the loan that INA – MOL gave to Energopetrol, the consortium now wants to convert into capital, i.e., the consortium wants to increase its ownership stake in Energopetrol by that amount - reveals a source from Patria, who is a high-ranking official in this oil company.

Legal and economic experts claim that such a way of increasing the consortium's ownership stake in Energopetrol would be illegal. What financial experts find most controversial in the intention of the Croatian-Hungarian partners is the treatment of the mentioned financial obligations of Energopetrol to the INA - MOL consortium.

The oil consortium INA – MOL recapitalized the Bosnian oil company in 2006. They became its two-thirds owner. According to the contract, the consortium had an obligation to invest an additional 150 million KM in Energopetrol over the next three years. As well as to take care of more than 1,000 workers who worked in the company.

An audit showed that the consortium did not fulfill its contractual obligations even ten years later. Neither towards the workers nor towards the company's infrastructure. Instead of investments of 150 million KM, the consortium gave Energopetrol a loan for that amount, on the basis of which they also charged interest. Now they want to convert that loan into new shares in Energopetrol.

Burdened by these encumbrances, Energopetrol is operating with increasing difficulty. The company's total loss as of December 31, 2015, amounts to 115 million KM above the level of Energopetrol's capital.

Many economic and legal experts believe that the FBiH Government should annul the contract with INA – MOL, and also seek compensation for damages, NAP writes.