Government to subsidise vital Dunaferr steelworks

The subsidy was announced by Hungarian PM Viktor Orban in a video message.

ECONOMY FEBRUARY 2. 2023 10:10

“We cannot expect help from Brussels, all we get from there is sanctions. The government will pay the wages of Dunaferr employees over the next six months,” PM Orban announced.

„We’ll protect jobs, and we’ll protect Hungarian families,”

Mr Orban stressed in a Facebook video, adding that

„Today I met with the team which has been working for many months to save Dunaferr, led by my fellow MP Lajos Meszaros, the MP for Dunaujvaros. Dunaferr has been ruined by its former owners, its managers and finally by the sanctions imposed by Brussels. Unfortunately, we cannot expect help from Brussels, all we get from there is sanctions. Nothing else. At today’s cabinet meeting, at the proposal of MP Meszaros, we decided that the government will pay the wages of Dunaferr’s employees for the next six months.”

This means that the government is providing around 16 billion forints for this purpose.

„In the coming months, we will work to make sure that after six months, the vitally important Dunaujvaros steelworks will have a new owner, who’ll ensure a dependable and stable operation,”

PM Orban summarised.

The bankruptcy procedure against Dunaferr, which has been in trouble for some time, was ordered in mid-December, a few days after the government threw the company a lifeline. The legal basis for the operation of ISD Dunaferr Zrt. has not been secured for a long time, it has neither a board of directors, nor a supervisory board or a managing director, and it has accumulated a significant

debt of almost five hundred billion forints, the daily Magyar Nemzet writes.

The situation even reached the point where the company could not even pay its electricity bills, so the government, by a decision published in the Hungarian Official Gazette on 30 November, prevented a catastrophic situation at Dunaferr by regulating the uninterrupted electricity supply of ISD Power Energiatermelo es Szolgaltato Kft, an integral part of the steelworks.

A government decree, published in the Hungarian Official Gazette on 13 December, states that if the court of registration of a company becomes aware that the company has not complied with the obligation to file and publish its annual accounts under the Accounting Act for more than 400 days and the net sales revenue of the company according to its last filed annual accounts is equal to, or exceeds, 10 billion forints, the court of registration will initiate bankruptcy proceedings against the company within three working days. The Metropolitan Court of Justice acted in line with this rule in mid-December.

In the autumn, Dunaferr decided to shut down both of its blast furnaces due to the energy crisis and the stagnation on the steel market. The immediate reason for the shutdown was that Donau Brennstoffkontor GmbH (DBK), a decade-long partner, unexpectedly refused to supply the essential raw material coke, the company said at the time.



Hungary, viktor orban