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MPF Holding in talks to take over troubled FÉG

Hungarian-owned MPF Holding, which makes grinding tools, wrought iron fixtures and furniture, has bought the loans of FÉG, which makes gas heaters, water boilers and stoves.

MPF is also in talks to take over operation of the company, which is under liquidation, MPF Holding said on Tuesday.

An agreement with the company's management and its lender has not been reached, MPF Holding said.

FÉG borrowed HUF 1.7 billion from Commerzbank last year to buy a company registered in Cyprus, where FEG's owner is also registered. The purchase dried up the company's liquidity at the end of 2010 and the situation turned critical in the past weeks. FEG's heating plant has been shut down, along with the gas and electricity, and its workers have not been paid, MPF Holding said.

Károly Bukodi, the mayor of Ócsa, where FEG 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.

Workers at FEG's plant in Ócsa, near Budapest, support about 200 families.

FÉG has annual revenue of about HUF 6-7 billion.