The Croatian government is in talks with the Hungarian energy group MOL to buy back its stake in the Croatian oil company INA, and this process should not be prolonged beyond the second half of this year, Economy Minister Tomislav Coric said on Wednesday.

Coric said that a series of meetings had been held on the buyback of MOL’s stake in INA and that the government had made its offer to the Hungarians last November.

MOL is analysing the offer and there are some additional consultations, and it is yet to be seen which way this will go, Coric said.

He did not reveal any details of the offer.

He said that this process should have its end given that more than four years had passed since the government decided to buy back MOL’s stake: “This whole saga should be over some time in the second half of the year.”

“Over the next four to five months it must be clear which direction has been chosen. If a transaction should be needed after that, it will take some time,” Coric said.

He said that the Croatian government could not support the status quo and was hoping that MOL would sell its stake. He added that it was also possible that MOL might sell its stake to a third party.

Should the Hungarian side be willing to sell its stake in INA, there is also a possibility that Croatia would buy it on its own or in an arrangement with Croatian legal entities. This would result in an increase in public debt, which was not what the government wanted initially, the minister said.

As a third option, if no agreement on the purchase price was reached, the two parties would redefine their partnership within INA to ensure a balanced relationship between the two shareholders in the management structure, including positions on the management board, responsibilities, obligations and rights, he said.

“In the case of a transaction, it will take some time, and if it does not happen, that should be made clear to the Croatian public,” Coric said.

Prime Minister Andrej Plenkovic announced in late 2016 that the government had decided to regain ownership of INA by buying back the entire stake held by MOL, after Croatia lost an arbitration case it brought against MOL before the United Nations Commission on International Trade Law (UNCITRAL) in Geneva.

In August 2019 the government chose the Anglo-French investment bank Lazard as a consultant. Lazard presented a preliminary report on due diligence last June and a final report in September 2020 giving an estimate of INA’s value.

MOL is the single largest shareholder in INA, holding 49.1% of shares (4,908,207 shares), while the Croatian government holds 4,483,552 shares, or 44.8%. Private and institutional shareholders hold 608,241 shares, or 6.1%.