Prime Minister Ferenc Gyurcsany said at a press conference on Wednesday that the government would guarantee loans for the purchase of beleaguered Hungarian meat company Papai Hus, which has been under liquidation for two years.
Mr Gyurcsany added that the government would discuss the concrete details regarding the guarantee in a few weeks.
Papai Hus 1913 Kft, which is composed of Papai Hus plant directors, the Agroprodukt company and the Papa (W Hungary) local council and waterworks, offered HUF 4bn (EUR 15.37m) for Papai Hus in a tender that expired on November 14.
Chairman-CEO Jeno Varga of liquidator Vectigalis said at a press conference on November 20 that Papai Hus 1913 has proposed paying 600-800m of the purchase price from its own resources, while taking loans, likely from the Hungarian Development Bank (MFB), for the remaining HUF 3.2bn-3.4bn.
The tender’s asking price for Papai Hus was HUF 7.1bn, though Mr Varga said at a press conference last week that he considered Papai Hus 1913′s bid of HUF 4bn to be realistic.
Mr Varga told MTI that Papai Hus expects to generate revenue of more than HUF 20bn in 2008, an increase of more than 10pc from 2007. Mr Varga said that the company expects to generate revenue of around HUF 22-23bn next year.
Mr Varga told MTI on November 12 that Vectigalis would close the Papai Hus plant if the tender proved unsuccessful, thus eliminating 1,300 jobs and jeopardizing the livelihoods of 2,500-3,000 hog farmers who supply the plant.
Papai Hus 1913 submitted the only bid in the tender for Papai Hus.