Troubles Deepening for Dunaferr as Liberty Steel Walks Away
Hungary's minister of foreign affairs and trade Mr Peter Szijjarto and GFG Alliance Chairmen Mr Sanjeev Gupta were in negotiations with a view to
Hungary's minister of foreign affairs and trade Mr Peter Szijjarto and GFG Alliance Chairmen Mr Sanjeev Gupta were in negotiations with a view to concluding the deal, but the company then went off radar. Argus, citing sources close to the situation, reported that Liberty Steel has withdrawn from takeover talks with Hungarian steelmaker Dunaferr. They suggest that the move could be driven by Liberty lender Greensill Capital's reported financial difficulties and Liberty having issues securing funding elsewhere with equity group Brookfield has walking away from financing talks with the company.
However a GFG Alliance spokesperson told Argus “GFG Alliance has adequate current funds, and its plans to bring in fresh capital through refinancing are progressing well. We are benefitting from a recovery in steel and aluminium markets, which mean that most of our businesses are running at near-full capacity to meet high demand and are generating positive cash flows."
Uncertainty over the future ownership of Hungarian steel producer Dunaferr is compounding the company's financial problems, with mill is producing at around half of its capacity and customers no longer prepaying for coils in fear of contracts not being honoured. In recent days, the head of a blast furnace told local media that, in addition to current coking supply restrictions, the two smelters that produce pig iron must be shut down. The coke is provided by one of Dunaferr's subsidiary ISD Kokszolo Kft and the raw material are purchased from external companies. Workers fear that in such a bad situation, at most, a miracle can save them from liquidation.
Established in 1954, Dunaujvaros based ISD DUNAFERR is one of the largest industrial producers in Hungary with primary steel production equipment’s including blast furnaces & 2 basic oxygen furnaces. It produces hot rolled coils, hot rolled pickled, cold rolled, coated and cold formed hollow steel section. Ukrainian group Industrial Union of Donbass ISD acquired Hungarian integrated flats producer Dunaferr in 2004.