Hungarian Watch Spring 2014
Hungarian Watch editions
Content
What will parliamentary election bring for the Hungarian market?
Carry on further/ Similar upcoming 4 years
The Hungarian governing party Fidesz-KDNP won the parliamentary election, even securing a two-thirds majority. What will this election bring for the Hungarian macroeconomic environment? What kind of market movements could come to Hungarian industries? Last but not least, what kind of transactions can be forecasted for the next term? The next term may bring some favorable investment incentives, substantial changes in the banking, energy and telecommunication industry, growth of manufacturing industries and increase of Eastern business deals.
Challenging times in the Hungarian retail energy sector
E.ON and RWE may sell their investments in the Hungarian retail energy sector
The Government is determined to continue its sharp price cut policy and to establish a non-profit retail energy sector. As a result of these measures, the Hungarian state is likely to acquire a greater stake in energy companies. The recent market events support that E.ON and RWE may completely exit the Hungarian retail energy sector.
MOL extends its upstream portfolio by entering the UK Continental Shelf
MOL bought exploration & producing licenses from Wintershall
MOL bought 14 offshore oil exploration & production licenses from Wintershall – a wholly owned subsidiary of German BASF Group – for approximately USD 375million. The offshore assets are located in the UK North Sea basin. The deal is of strategic importance as MOL has made its move onto the UK Continental Shelf.
Budapest candidates Olympic Games in 2028
Potential boom in the Hungarian sports industry
Organization of Olympic Games and other major sport events go together with great infrastructural projects and significant revenues from sponsorships and media rights. The Hungarian Ministry of State for Sport and Youth Affairs is positive that Hungary has a real chance to win the race to host the 2028 Summer Games if economic growth and existing budgetary discipline does not change. If the Government’s commitment remains, significant investments may come in the Hungarian sports industry.
Booming shared-service centre industry in Hungary
Two-thirds of the shared service centres in Hungary plan further investments
The Hungarian shared service industry is one of the great success stories of the country. As the result of this fast growth, there are already more than 80 shared service centres and many of them serve on a global scale. Two-thirds of the shared service centres plan further expansion. In addition, the Hungarian Investment and Trade Agency is currently dealing with more than 30 investment projects related to the establishment of further shared service centres. Hungary has already become one of the European hubs of shared service centres. If this course continues, a further investment boom is expected.
The New Civil Code entered into force
New rules of the game in Hungarian business life
After more than 50 years the new Civil Code entered into force on the 15th of March of 2014. The new Civil Code has substantial modifications pertaining to the foundation and operation of companies, as well as rules of contract and enforcement of claims. The changes fundamentally affect the position of business players. Businesses should pay special attention to adapt to the new commercial environment. Contracts and corporate documents may need to be reviewed, and legal advice may need to be obtained. Hungarian law firms expect a significant increase in their legal work.
Management liability under fire
Should executive officers take protective measures?
The New Civil Code - entered into force on the 15th of March in 2014 - fundamentally changed the responsibility of the executive officers vis-a-vis third parties. Under the new rule, the executive officers may be held jointly and severally liable with the company, if the damage was caused by the executive officer in connection with his position. It is subject to debate how the courts will apply this rule. Still as according to the new rules, personal assets of executive officers will be at direct risk, executive officers
shall consider taking protective instruments including obtaining a liability insurance and signing an indemnity agreement.