Croatia, Hungary PMs support INA/MOL oil share swap

ZAGREB, July 5 (Reuters) - The prime ministers of Croatia and Hungary threw their weight on Saturday behind plans to swap shares in national oil concerns INA INA.ZA (HINAq.L: Quote, Profile, Research) and MOL MOLB.BU, which should be finalised later this year.

"The two prime ministers said they supported the talks between the two companies and the plans to go for a share swap, if both sides agree," Croatian government spokesman Zlatko Mehun told Reuters by telephone from the Adriatic resort of Dubrovnik, where the two leaders met at an international conference.

"Now, the rest is up to the owners and the management," Mehun said after a meeting between Ivo Sanader and Hungary's Ferenc Gyurcsany.

Gyurcsany told reporters in Dubrovnik: "This transaction should enable both Croatia and Hungary to create added value on both sides," Crotian business website business.hr reported.

INA is 25 percent owned by MOL while the Zagreb government owns 44 percent, having distributed 14 percent of the biggest state company to war veterans and INA employees, and listed 17 percent of the stock in Zagreb and London.

Once the government's stock in INA fell below 50 percent, it was obliged to enter new talks with MOL on redefining the shareholders' accord. MOL has said it wants to boost its stake in INA

Government officials told Reuters last month the talks were likely to extend towards the end of the year.

THe government is also obliged by law to reduce its holding in INA to 25 percent, which should happen before the country joins the European Union, probably around 2011.

A share swap would help MOL boost its stake without spending cash and would put its shares in another set of friendly hands as it seeks to fend off hostile approaches from Austrian rival OMV (OMVV.VI: Quote, Profile, Research).