In December, the court ruled on the liquidation of ISD Dunaferr, the liquidation began on January 5, 2023
The Ukrainian group Metinvest outlined its interest in acquiring the Dunaferr steel plant, turning to the government of Hungary, informs Argus.Media.
In a letter to the Prime Minister of the country, Viktor Orban, the CEO of the Metinvest Group, Yuriy Ryzhenkov, noted, that Dunaferr is still considered «as a potential valuable addition to the group.» The steel plant can provide a number of synergies for the Ukrainian company and corresponds to its strategy, allowing full use of its own raw materials – iron ore concentrate, pellets and coking coal. In addition, the European asset will provide Metinvest with its own supply of slabs for processing assets.
Yuri Ryzhenkov also expressed confidence that Dunaferr as part of Metinvest will make a significant contribution to the Hungarian economy. The Ukrainian company conducted a comprehensive independent due diligence of Dunaferr in 2018-2019.
In the GMK Center’s comment on the published information, Metinvest’s press service reported that the group considers it necessary to monitor the situation around Dunaferr taking into account devastating consequences of a full-scale invasion of the Russian Federation for the company and iron and steel sector of Ukraine.
“The war has had a significant impact on Metinvest and the entire Ukrainian steel industry. The loss of control over the Group’s enterprises in Mariupol has led to a substantial decline in domestic iron ore consumption in the country, while the aggressor’s blockade of Ukrainian ports has made it practically impossible to export iron ore by sea. As a result, Metinvest has been forced to suspend or partly curtail the operation of its own mining and processing plants and send its employees to idle. Meanwhile, Hungary has started liquidation proceedings at Dunaferr, one of the largest coal and iron ore consuming plants in proximity to Ukraine.
Under the current circumstances, Metinvest considers it necessary to monitor the situation at Dunaferr. For Ukraine, a functioning plant would not only provide work for Ukrainian mining and processing plants in Kryvyi Rih, but also enable thousands of Ukrainian workers to receive decent salaries and provide for their families. Moreover, it would generate additional tax revenues for the Ukrainian budget and enable Metinvest to continue to provide vital assistance to the Ukrainian Armed Forces and civilians. In its turn, Metinvest is probably the only company in Europe that, thanks to its favourable geography and own iron ore production, can ensure continuous operations at Dunaferr and protect the plant from liquidation and its employees from losing their jobs. That is why the Group is demonstrating a certain interest in the developments at Dunaferr,” the press service noted.
British Liberty Steel is also interested in acquiring the enterprise. In December of last year, the Hungarian authorities turned to to the company with a request to ship coal to Dunaferr in order to avoid stopping the plant’s coke batteries – the raw material was redirected from Liberty Steel’s Polish assets.
Liberty had been in talks with Dunaferr about a potential buyout in early 2021, but the group’s interest cooled amid news of funding problems. According to Argus, a company delegation visited the steel plant this week, and the legal entity Liberty Central Europe was created.
As GMK Center reported earlier, in December 2022, the Municipal Court of Budapest decided to liquidate the Hungarian steel mill ISD Dunaferr. The plant received a temporary administration. At the same time, Tamas Pinter, the mayor of the city of Dunaujvaroš, where the plant is located, appealed to the government to take control of the enterprise, since the intervention of a private investor is unlikely.
Hungarian Dunaferr plant has been idle since the third quarter of 2022. In August and September of 2022, the company stopped the operation of two blast furnaces with a total capacity of 1.2 million tons per year due to interruptions in the supply of coking coal.
The annual capacity of the Dunaferr converter shop, equipped with two basic oxygen furnaces, is 1.6 million tons of crude steel per year. The annual capacity of casting production (production of slabs) is 1.7 million tons per year.