Russian investor eyes Hungary's largest steelworks

Russian investor eyes Hungary's largest steelworks
UkrHungary's leading steel works could change ha
By Tamas Szilagyi in Budapest August 25, 2020

Talks with investors are ongoing on the sale of one of the largest industrial producers in Hungary, ISD Dunaferr, part of Ukraine's Industrial Union of Donbas, Hungarian media wrote on August 25.

The Ukrainian owners are in the final stages of selling stakes in Hungary's largest steelworks, or the entire company to a professional investor, possibly from Russia, according to opposition MP from the region Gergely Kallo, who held talks with CEO Evgeny Tankhilevich on Monday. The talks were initiated by the local leader of Hungary's right-wing Jobbik party after management suddenly withdrew from the collective agreement with unions.

According to Russian media, key shareholder of the Russian steel giant Evraz Group, billionaire Roman Abramovich, announced his intention to buy Ukraine’s Donbass Corporation, the owner of Dunaferr.

The new investor is expected to bring capital to stabilise the company's position, according to Hungarian media, without going into details on the prospective buyer.

Tankhilevich ruled out that the Hungarian state would buy the embattled company, which is struggling with a shortage of orders due to the pandemic.

He also denied speculation about mass lay-offs prompted by the unilateral termination of the collective agreement with unions a week ago. Management cited the company's difficult economic situation and the coronavirus epidemic. The agreement will remain valid until February 2021.

ISD Dunaferr has had only a few years of profitable operation since 2008. It managed to come to the black in 2015 for the first time since after the economic crisis in 2008. In 2017 and 2018 it booked HUF18.2bn (€51mn) and HUF10.7bn in profit respectively. The company reported record sales of HUF368bn in 2018. Figures for 2019 are not available yet. 

Dunaferr employed 4,500 at the end of 2019.

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