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EMFESZ offers to rescue Nitrogénművek

  Energy market trader EMFESZ on Monday said it was ready to rescue troubled artificial fertilizer maker Nitrogénművek if it could acquire a stake in the company.

EMFESZ said it could take over Nitrogénművek’s almost HUF 14 billion (about $65.6 million) in loans from the state-owned Hungarian Development Bank (MFB) and start repayments. It could also ensure the company enough working capital to allow production to restart within two weeks. An acquisition by EMFESZ would not affect the management or the employee structure at the company.

If EMFESZ acquires Nitrogénművek, it would give MFB and the Agriculture Ministry seats on the board of directors for the next three years. It would also agree to regular testimony before parliamentary committee on Nitrogénművek’s positions and market conditions. EMFESZ said it would also lower artificial fertilizer prices.

EMFESZ which supplies Nitrogénművek with its gas, said it would guarantee the company continuous gas supply. EMFESZ has communicated its intent to acquire Nitrogénművek to the affected ministries and others involved in the matter.

Nitrogénművek was forced to shut down production in October as global artificial fertilizer prices dropped and the price of gas -- Nitrogénművek’s feedstock -- rose sharply. The government intervened in December, providing state guarantees for an investment loan up to €56 million investment loan and 80% of a working capital loan up to HUF 10 billion, to be provided by MFB.

The owners had to deposit 76% of Nitrogénművek shares as a collateral for the loans. In the case of non-payment, state asset manager MNV can buy the company for a token sum of one forint. Nitrogénművek is part of the Hungarian group Bige holding, and has annual revenue of almost HUF 50 billion. EMFESZ dominates Hungary’s deregulated gas market. (MTI-Econews)