As of 13 January 2024, a new government decree amends the provisions of the clearance procedure of the Government Decree on certain foreign direct investments (“FDI”). The amendment grants the Hungarian State a right of first refusal in respect of acquisitions of strategic companies whose main or additional registered activity is electricity production and pursue solar power plant-related activity that are to be acquired by foreign investors.
The Hungarian State may exercise the right through the Hungarian National Asset Management Ltd. within 60 working days. If the deadline expires without result, the right is lost. According to the amended procedure, the applicant must draw the attention of the competent minister to the possibility of a right of first refusal when filing its request. Following the submission of the request the Minister of National Economy will determine whether the transaction is covered by the right of first refusal and if so, will send the documentation to the ministry responsible for energy policy who will then decide whether the exercise of the right of first refusal is legitimate. If the ministry proposes the exercise of the pre-emption right, the FDI clearance procedure will be terminated with the reasoning that the minister responsible for energy policy is of the opinion that the exercise of the right of first refusal is justified.
Finally, according to a Government Resolution, the target companies have to be transferred to the state-owned MVM Zrt. within 6 months from their acquisition by the State and the minister responsible for energy policy is mandated to be the beneficiary of the ownership rights and obligations of the State over the strategic target companies acquired as a result of the right of first refusal.
By Rozsa Rusvai-Darazs, Attorney at law, KCG Partners Law Firm
