The decision authorises INA's Management Board to issue by the end of the year, with prior approval from the Supervisory Board, a maximum HRK 1.5 billion worth of bonds that can be exchanged for shares.

The Supervisory Board must approve the issue with the votes of at least seven of its nine members.

The maturity date of exchangeable bonds is a maximum three years and the bonds, on the condition they have been paid for, give their holders the right to swap them for ordinary shares.

The shareholders' meeting also adopted a decision on the conditional increase of the company's equity under which the deadline for subscribing for shares would start running on the day of subscription for bonds and last until 20 days before their maturity.

The decision on exchangeable bonds will make it possible to increase the company's equity without taking bank loans and changing relations between shareholders, INA Management Board president Zoltan Aldott said.

Exchangeable bonds do not serve for paying debts or making payments to suppliers, but for maintaining and intensifying investments, said Aldott.

INA's current debt to the state is around HRK 250 million and the company has agreed with the Finance Ministry to pay it over the next six months, said Aldott, adding that INA did not have due outstanding liabilities to the state.

The company's management and supervisory boards will decide when exchangeable bonds will be issued, Aldott said, adding that only the upper limit of the issue had been determined and that it was important that the decision could be carried out by the end of the year.

The decision on exchangeable bonds reduces the maturity date of exchangeable bonds from five to three years.

The proposal not to give INA's small shareholders the right to subscribe for bonds was opposed by the president of the union of workers in INA and in the oil industry and representative of some of the small shareholders, Bozo Mikus, who asked that small shareholders be allowed to subscribe for exchangeable bonds.

However, INA's executive director for finances Andras Huszar recalled that exchangeable bonds had already been mentioned in an annex to an agreement on gas business between the Croatian government and MOL and that including small shareholders would require a public tender, which would prolong the entire procedure and make it more expensive.

The shareholders' meeting was also informed of INA's business results in 2009 and it adopted a decision on covering the company's 2009 loss amounting to HRK 631.3 million with retained profits in the amount of HRK 343.4 million and with other company reserves in the amount of HRK 287.9 million.