Liberty Steel, owned by Indian-born British billionaire Sanjeev Gupta, submitted the winning offer to buy the assets of Hungarian steelmaker Dunaferr, currently in liquidation, Hungary’s Economic Development Ministry said on July 11.

Liberty Steel offered €55mn for Dunaferr's assets, some €2.1mn above the minimum required price.

Four other companies were in the race:  India’s Vulcan Steel, Ukraine’s Metinvest, Swiss-based Trasteel Trading Holding and Trinec Property from Hungary.

Liberty Steel provided the Hungary factory with 40,000 tonnes of coal by January to ensure the continued operations of the company and to restart production at its second furnace. In February, the company agreed with the government on a contract manufacturing agreement for the production of hot-rolled coil for its coil coating operations.

The successful sale of the assets is an "important milestone", "but the difficult work is about to begin", the economy ministry said in a statement. The steelworks needs to undergo a reorganisation and "significant developments" to upgrade to green production technology, it added.

Liberty Steel will need to dig deep in its pockets to turn around the company. The new owner needs to inject HUF37bn just to regain environmental permits.

In February, the government transferred some HUF16bn (€42mn) to cover Dunaferr's payroll for a period of six months, but that is only a fraction of the money needed to revive the debt-laden company.

Dunaferr was put in liquidation in mid-December.  According to local media reports, it accumulated HUF500bn (€1.3bn) in debt by the end of 2022. 

Low steel prices amid surging energy bills, and supply chain issues after the war put the company on the brink of collapse, but the fighting between owners did not help either.

Ukraine’s Donbas Industrial Association group (ISD) acquired a majority stake in one of Hungary’s largest industrial complex, employing 4,000. As ISD depended on loans from the Russian state-owned Vnesheconombank (VEB) following the 2008 financial crisis, the Russian lender also gained ownership in the firm.

Dunaferr is owned 99.6% by Cyprus-registered Steelhold Limited with three owners, VEB, Ukrainian Sergei Taruta and Ukrainian-Armenian-Russian Oleg Mkrtchyan, who at present is serving a 9-year prison sentence in Russia.

The Russian and Ukrainian owners have fought for ownership of the firm for years. The company is headed by Yevgeny Tankilevich, but the Russian owner has questioned his eligibility as deputy general director.