Nitrogenmuvek plans HUF 10bn capacity expansion

The investment will boost capacity by 15-40% and cut the company's energy consumption by 15%, Mr Bige said.

Last week, Nitrogenmuvek issued €50 million of corporate bonds with the cooperation of BNP-Paribas, he said, declining to reveal any information about the conditions other than that they were favourable.

Nitrogenmuvek has a HUF 20 billion stock of cash and wants to pay off the remaining €29 milliom (about HUF 7.8 billion) it owes the Hungarian Development Bank (MFB) in a single installment soon, Mr Bige said.

Gyula Budai, the government's commissioner for investigating public corruption, reported the loan in July on suspicion of misappropriation of funds.

Mr Bige told the paper the company took out the €85 million loan from the MFB in 2008, not in 2005, as alleged, and that it had repaid €35 million in two years and the remaining €50 million later. The government gave Nitrogenmuvek a guarantee on the credit for a HUF 301 million fee and Nitrogenmuvek put itself up as collateral, he added.

Nitrogenmuvek's exports now generate 60% of revenue, up from about 40% in 2009. German partners pay HUF 12,000 more per tonne of artificial fertiliser than domestic ones, Mr Bige noted.

Nitrogenmuvek buys gas on two Western European gas bourses and it works with four companies that have gas stores in Austria, he said. The cost of buying gas from Hungary's centrally regulated strategic gas reserve runs up additional costs of HUF 1 billion per year for the company, he added.

All but one of Nitrogenmuvek's 29 companies are profitable, Mr Bige said.

Nitrogenmuvek is building a new bread factory in Romania and modernising a mill there at a cost of €10 million, he said.