Tender for Dunaferr did not meet the criteria of transparency – Metinvest

Metinvest group, which was one of the bidders for the acquisition of the Hungarian Dunaferr steel mill, notes that from the very beginning the tender did not meet the criteria of transparency. The timing of the tender was very tight and information for bidders was limited. GMK Center was informed about this by the press service of the company.

It seemed that the Hungarian government was trying not to attract the attention of a large number of potential investors, but to divert it. In particular, Metinvest was excluded from participation in the tender for the following reason: the relevant ministry did not provide the liquidator with a conclusion that the group successfully passed the National Security Screening procedure.

«At the same time, despite our repeated appeals, the government did not provide Metinvest with a conclusion that we did not go through such a procedure and the reasons for not going through it», the company said.

The press service notes that after the announcement of the tender and determination of the guarantee fee, given its size, the expected value of Dunaferr should have been €200 million. But after Metinvest was excluded from the tender, the Hungarian government set a price of around €50 million.

In the end, according to the results of the final bidding, in which only two participants took part, the British Liberty Steel won, offering a sum of €55 million for an integrated steel plant with a capacity of more than 1.5 million tons of rolled steel per year. At the same time, the Hungarian government transferred the plant to the management of this company in the winter, without holding public tenders.

«Considering these factors, it can be assumed that the tender from the beginning was designed by the Hungarian government as a mechanism to legalize the transfer of the plant at a non-market value to a specific buyer – Liberty Steel. In our opinion, given the non-compliance of the conducted auction with transparency criteria, the EU antimonopoly authorities should pay attention to the actions of the Hungarian government during the tender for the plant and make their decision», Metinvest said in a statement.

For the Ukrainian company, participation in the tender for the purchase of Dunaferr was primarily an opportunity to load the Ukrainian mining facilities in Kryvyi Rih, which is partially idle due to the blockade of the ports by the Russian aggressor and the loss of control over the Mariupol assets.

«That’s why Metinvest was really interested in the Hungarian steel plant because it is work for thousands of Ukrainians, taxes for the budget and foreign currency income for Ukraine», the press service emphasized.

As GMK Center reported earlier, Liberty Steel in July 2023 won the tender to acquire Dunaferr, becoming the winning bidder through its subsidiary Liberty Steel Central Europe Kft. Earlier, in June 2023, tender applications from other participants were excluded, including Metinvest, Swiss Trasteel Trading Holdind and Hungarian Trinec Property. In particular, Trasteel did not pay the €4 million guarantee (pledge) by the set deadline. Thus, British Liberty Steel and the private company Vulcan Steel, registered in Mauritius, remained competitors for the acquisition of the steel plant.

As GMK Center reported earlier, the state, Liberty Steel, Metinvest, Swiss Duferco, Chinese Hesteel, which owns the Zelezara Smederevo plant in Serbia, Indian Jindal Steel and a consortium from Kazakhstan were previously named among the candidates for the plant.