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FÉG takeover talks founder

MPF Holding has failed to reach an agreement with FÉG Konvektorgyártó on a buyout in talks that ran late into the evening on Tuesday, the local government of Ócsa, where FÉG is based, said.

FÉG makes gas heaters, water boilers and stoves.  The plant's workers will probably lose their jobs, said local government spokesman András Ambrus.

FÉG's two board members at the meeting said the company's owner had not given them a mandate to negotiate any such deal so the matter could not be discussed further.

Another forum will be held at the town's civic center on Wednesday but if the sides do not move any closer, the company could be wound up, Ambrus said.

Hungarian-owned MPF Holding, which makes grinding tools, wrought iron fixtures and furniture, bought the loans of FÉG.

FÉG borrowed HUF 1.7 billion from Commerzbank last year to buy a company registered in Cyprus, where FÉG's owner is also registered, MPF Holding said.

The purchase dried up the company's liquidity at the end of 2010 and the situation turned critical in the past weeks, it added.

FÉG's heating plant has been shut down, along with the gas and electricity, and its workers have not been paid.

Károly Bukodi, the mayor of Ócsa, where FÉG is based, and Lajos Szűcs, an MP who also heads the Pest county local government, have joined in the talks in the interest of reaching a quick agreement, MPF Holding said.

FÉG had annual revenue of HUF 6-7 billion before its troubles started.

MPF Holding chairman-CEO Zsolt Felcsúti said in a statement on Wednesday that FÉG's owner said it was not prepared to consider MPF Holding's offer.