News Media Centre
Subsequent to the approval by the European Commission, MOL and E.ON-Ruhrgas International agreed on closing of the gas business sales transaction on January 12, 2006Subsequent to the approval by the European Commission, MOL and E.ON-Ruhrgas International agreed on closing of the gas business sales transaction on January 12, 2006
Originally signed on November 11 2004, MOL and E.ON-Ruhrgas International (ERI) concluded an agreement on the sale of a 75% stake less one share in MOL Natural Gas Supply Co. (wholesale, marketing and trading, that is "WMT") and MOL Natural Gas Storage Co. ("Storage") and a 50% stake in Panrusgaz Hungarian-Russian Gas Industrial Co ("Panrusgaz").
Conditional approval of the European Commission also stipulated that as part of this transaction, the WMT and Storage companies shall be fully divested. Accordingly, MOL sells its 100% stake in the said companies to ERI as of the Q1 Y2006 closing. Sale of the stake in excess of what has been stipulated in the original agreement is subject to the approval of the Hungarian Energy Office.
As a consequence of the requirements set by the European Commission, as well as changes of the industrial and regulatory environment, the Parties made additional changes to the original sales agreement. The final purchase price was determined based on the actual level of indebtedness and working capital as of the date of closing the transaction, and a number of price adjustment items. The purchase price - based on the March 31 2006 balance sheet forecast and adjusted by the maximum amount of all potential future financial liabilities of MOL associated with this transaction - is EUR 300 million for the 100% ownership of WMT and Storage.
In addition, ERI will take over the debt of EUR 600 million of Storage and WMT from MOL (also based on a 31 March 2006 balance sheet forecast). As a result of the effect of adjustment items, the purchase price may increase, but not more than EUR 290 million.
In line with its 2006-2010 Strategy announced, MOL intends to utilise the capital released from the gas business in its two core businesses, upstream and downstream through value creating investments that support the continued growth of the Group. In conformity with its Strategy, the MOL Group remains a key player and system operator of natural gas transmission in Hungary.
MOL believes that the business partnership established with E-ON will improve the long-term safety of natural gas supply of Hungary and at the same time, it also contributes to the enlargement of natural gas market liberalisation and competition.