Hungary Plans to Buy Back Ailing Steelmaker Dunaferr in Job Rescue Scheme

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By m rochan | August 21, 2013 12:49 AM EST

Hungary plans to buy back troubled steelmaker Dunaferr from Ukraine's ISD Group (ISD Dunaferr).

Hungary's government will attempt to buy back steelmaker Dunaferr from Ukraine's ISD group to prevent employee layoffs at the loss-making Hungarian firm.

Budapest has offered to initiate talks to buy out the troubled firm, economy minister Mihaly Varga said. He refused to put a figure on the buyout.

Dunaferr plans to layoff 1,500 workers but a takeover would protect the jobs of the 7,500 steelworkers in the long term, Varga said on national television after a cabinet meeting.

He said the buyout would "reverse the bad privatisation" of Dunaferr in 2004.

Dunaferr swung into the red after the 2008 global economic crisis.

Hungarian national news agency MTI quoted a Dunaferr official as saying that the company has incurred losses of about 50bn forints (£142m , €166m , $222.25m) over the past two years.

Prime Minister Viktor Orban's government, which is seeking re-election in 2014, wants to regain control over industries it deems strategically important. State-owned development bank MFB is negotiating with Germany's DZ Bank to acquire the latter's 37% stake in Takarekbank, a Hungarian savings cooperative.

Hungary has repurchased the local natural gas business of German utility firm E.On and has acquired a controlling stake in motor parts maker Raba. The government has also raised its stake in oil company MOL.

The Orban government recently cut electricity and gas tariffs in a move expected to hit utility firms in Hungary in the long run.

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