(Bloomberg) -- Mol Nyrt. pledged shares worth 5% of the company toward a public trust set up jointly with the Hungarian state, the latest deal with the refiner's stock that deepens ties with the government.
The company will allocate almost 43 million shares, worth about 94 billion forint ($305 million) at current market prices, to a foundation, with Hungary donating an equal amount of capital. The foundation will take over a majority of Mol's social responsibility operations with a focus on sport, culture, health and environment protection.
“We estimate that the decision is negative to the shareholders' value,” Tamas Pletser, an analyst at Erste Bank in Budapest, said in a report. The transaction may depress the value of a Mol share by as much as 92 forint, he said.
Mol stocks fell as much as 2.8% on Thursday, underperforming the benchmark BUX index. They traded down 2.4% at 2,182 forint at 2:18 p.m. in Budapest.
Opposition parties have criticized Prime Minister Viktor Orban for starting foundations to cement his influence before elections next year. The foundation boards include government appointees with long mandates and their finances are exempt from rules safeguarding public spending. State-owned shares amounting to 20% of Mol have already been allocated to two funds financing colleges.
If the Hungarian state also uses its Mol shares as contribution to the new foundation, then about 30% of the shares of the country's biggest energy group will be controlled by “three obscure, quasi-state controlled foundations,” Pletser said.
Mol said the transaction may be finalized in the next two quarters, once parliament passes the necessary laws.
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