(Adds details, market source)
PRAGUE Jan 21 Czech electricity producer CEZ
said it was considering what to do with a 7 percent
stake in Hungarian oil refiner MOL that it is likely
to hold after an option for MOL itself to buy the shares expires
The call option on 7.68 million MOL shares has a strike
price of 20,000 forints ($89.81), far above Tuesday's market
price of 13,955 forints, which gives MOL no financial incentive
to exercise the option.
MOL had no comment on its plans for the option.
"The date of the option expiration is not limiting in any
way. CEZ is considering further action at the moment," CEZ said
in response to emailed questions.
"The expiration ... of the option does not in itself have
any impact on CEZ group results. Our exposure to MOL shares has
been continuously re-evaluated in relation to the development of
the share price and other market factors," it said.
A market source with close knowledge of CEZ said the company
was looking at a plan to hold the shares for the next three
years - rather than try to unwind the stake in the market -
under a structure involving convertible bonds.
CEZ did not answer Reuters questions on such plans.
CEZ bought the 7 percent equity stake in MOL in 2008, when
MOL was fighting a takeover attempt from Austria's OMV
. It sold a call option to MOL at the same time, later
extending it until Jan. 23, 2014. MOL has been paying a premium
to CEZ for the option.
The firms also agreed to jointly build gas-fired power
stations under what they called a strategic alliance. But that
plan was abandoned as gas went out of favour due to a fall in
($1 = 222.6822 Hungarian forints)
(Reporting by Jason Hovet, Jan Lopatka and Krisztina Than;
editing by Jane Baird)