The government will make a purchase offer for Bakonyi Power Plant, which supplies troubled alumina maker MAL, the government spokesman’s office said on Wednesday.
The government decided to make the offer after discussing the situation of MAL and the question of bills it owes Bakonyi Power Plant, the office said.
“Preserving the affected jobs and provision of heating in the area, Ajka, is of great importance for the government; thus, to manage the problem, the government established a workgroup with the participation of the ministries concerned and will make a negotiated offer with regard to the Bakonyi Power Plant,” it added.
On Tuesday, unions of MAL submitted a petition to the government asking for help to save jobs at MAL and its suppliers. MAL employs more than 1,000 workers and the jobs of about 5,000-6,000 people are at stake, including suppliers, according to the petition which had some 6,000 signatures.
MAL was fined HUF 135bn last year for environmental damage caused by a toxic sludge spill at its plant in Ajka (NW Hungary). A reservoir at the plant ruptured in October 2010, sending a flood of red sludge through surrounding villages that killed ten people and damaged hundreds of homes. The event was Hungary’s worst ever environmental disaster.
MAL had revenue of HUF 32.7bn in 2011, public records show.
Hungarian papers said earlier that the state-owned Hungarian Electricity Works (MVM) wants to buy Bakonyi Power Plant from Euroinvest, a company owned by construction magnate Sandor Demjan.
MAL CEO Zoltan Bakonyi told MTI that they would cooperate in any solution necessary for preserving the workplaces. He added that they continue to need the full cooperation of the bank consortium and the suppliers to do so.
CEO of Bakonyi Power Plant Frigyes Nemeth would not comment on the announcement of the purchase offer, saying that they had no detailed information yet. Earlier he said Bakonyi Power Plant must deal with several issues before it can start negotiations on a change in ownership such as the debts of almost HUF 1.5bn owed by MAL, which the power plant company is unable to finance any longer.
The other issue that needs to be settled is the court case initiated by Bakonyi Power Plant against the state almost 18 months ago over the withdrawal of one-third of the company’s bioenergy production quota by the Hungarian Energy Office (MEH) from January 2011.