Standard & Poor’s modified the long-term corporate credit rating of MOL

MOL Plc. hereby informs the capital market participants that Standard & Poor’s downgraded the long-term corporate credit rating of MOL Plc. from BBB- (with negative outlook) to BB+ (with stable outlook) today. S&P’s decision was made following that the sovereign credit rating of the Republic of Hungary was downgraded to BBB (with negative outlook) on 17 November, which reflects the general expectation on recession in the country and the region. The unfavourable changes in the industry and the financial market outlook influenced this decision significantly.

The above has not changed the fact that MOL has strong financial position, including liquidity and capital strengths. MOL has currently over EUR 1.5 bn undrawn credit facilities and cash deposits, which provide proper financial flexibility in the short and medium term as well.

Net debt of MOL as of 31 October 2008 was approximately EUR 2.97 bn, resulting in a gearing of approximately 39.2%. The earliest large scale refinancing is required in Q4 2010.

MOL has flexibility and ability to respond swiftly to the further challenges of volatile market conditions, expected global economic slowdown and turbulent financial environment. In order to strengthen the prudent financial discipline MOL is committed to maintain financial headroom of at least EUR 1.2 bn undrawn credit facility as a golden reserve.

In order to achieve the above mentioned aim, the management initiated to decrease the 2009 CAPEX by approximately 35%, which is planned to be financed fully from the operating cash-flow in 2009. The detailed revision of the 2009 investment plan – in line with the CAPEX target – is in progress. The spendings will be cut in a rational, but conservative way with regard to the long term strategy of the Group and taking into account the capital goods deflation as well as changes in the macro environment. In addition, a range of operating cost reduction measures has been initiated, expectedly leading to EUR 80-100 mn cost savings.

With these rationalization programs MOL intends not only to maintain its outstanding competitive position in the industry but establishes a strong base for reducing the actual debt levels in the medium term, as soon as the industry and the macro environment are stabilized.

Consolidation of INA is invariably regarded by the Company as a high priority strategic goal because this step can create significant shareholder value in the next years.