Hernadi: "Mol does not wish to renationalise itself"

If Mol's management were interested only in its own short-term interests, it would support OMV's buy-out offer, according to Zsolt Hernadi, the company's 47-year-old chairman and CEO.

hvg.hu: Did the the civil protest action at the beginning of August have any effect? Following release of pollutants into the Raba and OMV's attempt to buy Mol, some people boycotted OMV filling stations. Did Mol support this boycott?
L.H.: We sold a bit more petrol and diesel in August than in June, and sales of fuel cards also rose slightly. That makes it a typical summer season. As a private individual, I understand the action, because Raba is the only river in Hungary suitable for wild-water rowing. But OMV's attempt to buy Mol and pollution are two different issues. We would never support calls for a boycott of a commercial rival.

hvg.hu: It is assumed that OMV took a look at Mol either in order better to stand up to the Russian energy companies or to sell the company on to them. What's your view?
L.H.: At least we can agree that OMV is not interested in Mol in order to create mutual benefits for both countries. A bigger company is not automatically a more efficient one. When buying something, you have to look at what will make a company better, and not what will make it bigger. And we're certain that EU competition authorities would impose conditions for such an acquisition which would disadvantage not just Mol's shareholders but also its employees and the whole Hungarian population. If Mol were a subsidiary of OMV, Vienna would decide how much would be spent in Hungary and the rest of the CEE region on investments and development. If Mol's shares were withdrawn from the stock exchange, it would leave not just a large number of local market analysts unemployed, but many law firms, auditors and other suppliers would have to make redundancies. It would be a backwards step for Mol, if OMV, which is one third owned by the Austrian government, gained influence over Mol, since it would be less concerned with what happened in Hungary and Slovakia when it came to strategically important investments. None of the cosmetic tricks usually employed, like changing the company's name or listing its shares on the Budapest Stock Exchange, would change this fundamental fact.

© Túry Gergely

hvg.hu: So why have you been discussing cooperation deals with OMV for years? Is it true that there was talk earlier this year of swapping shares and supervisory board members?
L.H.: Since 2000, when OMV acquired a 10 per cent stake in Mol without informing us in advance, we have occasionally discussed the kinds of things we could cooperate on. There have been some joint actions. In 2002, for example, we were going to buy a majority stake in the Czech Republic's Unipetrol, but the Czech government decided not to seel. When it put it back on the market, OMV had changed its mind, so we set about buying it ourselves. We looked at opportunities for cooperation again a year ago, but we rejected most of the possibilities, primarily because there would have been competition restrictions that would have made them commercially unviable.

hvg.hu: What ideas did you consider?
L.H.: We looked at cooperating in the gas industry and in petrochemicals. Since Mol does not wish to renationalise itself, we are only interested in joint projects, since only these will allow us to create value. We have no interest in gaining a majority holding. On a corporate level, at least, beyond the obstacles I've already mentioned, the two companies' operating cultures would clash. Since Mol's privatisation, we have worked on the principle that every shareholder must be treated equally. At OMV, that's impossible because of the two holding companies that represent the Austrian state. There would have been problems with competition law and security of supply as well.

hvg.hu: What do you mean by the latter?
L.H.: For example, the Austrians would have decided whether it was the Schwechat refinery they sold off, or Mol's refineries in Bratislava and Szazhalombatta.

hvg.hu: Why are you so sure that one of your refineries would have to go if you joined together and not the Schwechat refinery?
L.H.: Because we already asked the EU's competition lawyers, who said that if OMV bought Mol, it would almost certainly be necessary to sell one of the refineries. And, as Wolfgang Ruttenstorfer, OMV's chief executive, said, Schwechat is not for sale. From that you can tell which refinery the Austrians would sell.