Croatia Receives 10 Bids for Stake in INA

Croatia will release the names of the bidders that made the shortlist in early July for the 25% stake in state-owned INA from among the investors that presented expanded offers by the June 14 deadline. Some of the companies that made the list are Edison, Lukoil, Rosneft, Sibneft, OMV and Mol; and some other regional groups acting alone or in consortiums. "A successful privatization of INA is of strategic interest to Croatia and a precondition for its integration into Europe," a statement quoted Deputy Prime Minister Slavko Linic as saying. "The government is aware of the importance of this process for future growth of Ina and the entire Croatian economy."

Sell-off advisers Deutsche Bank and PricewaterhouseCoopers will review the offers according to the strategic vision presented by the bidders and their proposed contribution to the Croatian economy.

The shortlisted bidders will be able to conduct due diligence during the summer and submit binding offers after that. The government plans to float approximately 15 percent of INA on the local market at a later stage. INA has been valued at between 1.2 and 1.8 billion euros by the sell-off advisers. After years of losses the company reverted to profit last year, posting a group net of 48 million euros on 1.9 billion kuna in revenues, thanks to liberalization of oil prices and restructuring efforts. In 2001, INA also reduced its gearing by some eight percentage points to 27 percent as it paid back a foreign bank loan. It also swapped stakes in the Adriatic pipeline operator Janaf and gas business Plinacro with the government in exchange for $175 million in debts to London and Paris Club creditors.

The strategic partner will be asked to inject fresh capital to finance INA's further growth and will not be allowed to lay off any of INA's 17,000 work force for a period of three years or close down any of its oil fields. Its two refineries are in dire need of fresh investment.

INA, the largest Croatian company, deals in exploration and refining and also operates a retail network in Croatia and neighboring countries. Its 2001 output was two million tons of crude and 1.8 billion cubic meters of natural gas.


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