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Dunaferr may not accept government assistance package

Hungarian steel company Dunaferr may forgo as a result of improving global economic conditions a HUF 9 billion (€34 million) government assistance package that has been under consideration since this spring, the daily newspaper Népszabadság reported on Monday.

Sources close to both Dunaferr and the state-owned Hungarian Development Bank (MFB), which has been preparing the loan for the troubled steel company, refused to confirm this information.

Népszabadság noted that the government assistance package was contingent upon a HUF 2 billion subordinate loan from Dunaferr's owner, the consortium of the Ukrainian steel company Donbass and its Swiss peer Duferco.

Dunaferr is also counting on HUF 2 billion in government job-preservation support, according to Népszabadság. Sources told the newspaper that the government is currently in talks with the European Union to determine if such assistance would violate EU regulations regarding state support.

Hungary's ministry of economy said it could not comment on such negotiations until they are completed.

Népszabadság reported that Dunaferr is attempting to retain all of its current 8,000 employees, noting, however, that an agreement concluded at the time of Dunaferr's privatization five years ago restricting the number of workers that company can dismiss will expire at the end of the year. (MTI-ECONEWS)