The takeover of Talgo that has just been presented by a Hungarian consortium is expected to become the central government’s third major business headache in just over a year. If the first was the confrontation with Ferrovial over its decision to move its headquarters to the Netherlands and the second the mobilization of public capital to compensate for the entry of Saudi Telecom into Telefónica, the third consists of the fear that a strategic manufacturer of trains fall into the hands of a Hungarian consortium dominated by state interests and linked to Russia.
Behind the consortium that launched the tender, called Ganz-Mavag, there is 55% of the oil company MOL (Hungarian Oil and Gas), which has hydrocarbon production assets in Russia. The other 45% belongs to the Hungarian state fund Corvinus, which gives the Government of Viktor Orbán influence in the operation.
MOL reports in its 2023 accounts that it owns 51% of a company called Baitex that produces the equivalent of 3,800 barrels of oil a day in Russia, an amount that amounts to 1.3 million barrels a year. The current price of oil is at 83 dollars.
The Hungarian oil company entered Russia in 2006 after acquiring 100% of Baitex. In 2014, he sold 49% to Turkish Petroleum, but continues to consolidate the company in his accounts, since he has the majority of the capital and acts as an operator in the projects. Baitex is based in Moscow, has 150 employees and has reserves of 28 million barrels, as reported by MOL on its own website.
After the invasion of Ukraine, the EU banned Russian gas, but not oil. However, Spanish energy companies broke off their relationship with Russia. The Minister of Transport himself, Óscar Puente, expressed his rejection of the Hungarian offer this week, alluding precisely to Russian interests.
Pedro Sánchez assured yesterday from Chile that the Central Government is analyzing the operation “to see exactly the details” and that it will work to “guarantee” the “future stability” of the company. He recalled that the antiope shield allows him to intervene in the operation, a circumstance that the Hungarian consortium itself recognizes, since its offer is conditional on the approval of the Council of Ministers.
Executive sources point to the “strategic character” of Talgo and its “fundamental” role in rail mobility, but they recognize that a “balance” must be achieved so that the country remains “attractive” to foreign investors.
The central government’s reluctance contrasts with the position of Talgo’s board of directors, which unanimously supports the Hungarian offer. The shareholders who control 40% of the capital, including the US fund Trilantic, the Oriol family and businessman Juan Abelló, have announced that they will sell their shares and are even offering to support the buying consortium in the managements you need.
The desire to sell increases due to the perception that the company is not going through the best time. It needs additional resources to tackle the projects and is starting to have problems in one of its flagship contracts, that of manufacturing trains for Germany’s Deutsche Bahn.
An additional problem for Talgo is the Renfe penalty for delays in the delivery of Avril high-speed trains. Yesterday it was precisely learned that Renfe informed Talgo by letter, one day before the presentation of the tender, that the penalty will increase to more than 166 million. To the initial 116 million will add 50 million for lost profit and 80,000 euros more for each day of delay from April. These trains are key to completing high speed in Asturias and Galicia.
Renfe’s letter puts financial pressure on Talgo; its shares fell by 3.2% yesterday, up to 4.25 euros. Ganz-Mavag’s offer is 5 euros per share and values ??the company as a whole at 619 million euros. It is usual that, following the launch of a tender offer, the shares tend to trade at levels similar to the amount offered.
In the information sent by the CNMV to the Hungarian consortium it can also be seen that the potential buyers have not reached an agreement with Talgo’s creditor banks on credits for nearly 300 million euros, the cancellation of which they have entities in the event of a change in control of the company.
