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UPDATE 1-Bosnia region likely to end deal with MOL/INA

Published 10/29/2009, 01:53 PM
Updated 10/29/2009, 01:57 PM

(Updates with more quotes, background)

SARAJEVO, Oct 29 (Reuters) - Bosnia's Muslim-Croat region may end a deal with a consortium of Hungary's MOL and Croatia's INA, majority owners of its fuel retailer Energopetrol, over contract breaches, the prime minister said on Thursday.

"All commissions have presented negative reports about the the investments the consortium should have made into Energopetrol and we will most likely end the contract," the Muslim-Croat federation Prime Minister Mustafa Mujezinovic said.

The consortium of oil and gas group MOL and INA in 2007 acquired a 67-percent stake in Energopetrol for 10.2 million Bosnian marka ($7.6 million) and pledged a further 150 million marka investment.

According to the contract its should have invested the amount into servicing Energopetrol's debt, as well as into the modernisation and expansion of its petrol stations network.

But Mujezinovic said that government commissions have found that the consortium has failed to respect its contractual obligations. He did not elaborate.

"The government will most likely decide to terminate the contract at one of its next sessions," he told a news conference.

MOL is INA's biggest shareholder with a 47 percent stake. The government owns the remainder.

The sale of Energopetrol, Bosnia's largest fuel retailer, to the MOL/INA consortium had been delayed because of its mounting debt and political bickering in the federation. ($1=1.32 Bosnian marka) (Reporting by Maja Zuvela; Editing by David Cowell and Jon Loades-Carter)

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