Hungary plans to privatize most shares in a state arms company

The Hungarian government plans to privatize most shares in the state -owned company N7 Holding, which has shares in nine defense industry companies, “Reuters agreed on Thursday, citing the announcement of the Hungarian Ministry of Economy.

Shares will be purchased by 4IG, a Hungarian technological giant and national leader of telecommunications services. According to the plan, the shares of enterprises from the arms sector will be transferred to the newly created subsidiary, N7 Defense ZRT. Then 4IG SDT – subsidiary 4IG – will buy a majority package of 75 percent. shares plus one vote. Other shares will still be owned by the Hungarian government.

The ministry estimated the value of sales to the equivalent of $ 238.4 million. The agreement includes the government's shares in the Hungarian branch of the German defense equipment manufacturer Rheinmetall, the Airbus Helicopters factory and other ammunition concerns and military equipment.

Reuters reminded that 4IG has become a dominant company in the IT industry in recent years thanks to, among others acquisitions and lucrative state contracts. The Bloomberg agency noticed that Budapest “helped create a company as a domestic champion in the telecommunications sector, supporting the takeover of (through it) vodafone hungary”.

“After years of acquisitions financed by debt, listed on the 4IG stock exchange is heavily indebted, with 931 billion forints ($ 2.69 billion) of long -term liabilities at the end of 2024. The company recorded a net loss in both 2023 and 2024.” – Bloomberg pointed out.

4IG aroused interest in the market this year when its general director Gellert Jaszai met in the USA with Elon Musk, and the company appointed two associates of the US President Donald Trump, Richard Grenell and Matt Mower, on their advisers.

In March, Jaszai was appointed to the position of a special envoy of Hungary for international investment.

Planned privatization caused criticism in Hungary from the opposition. Peter Magyar, the leader of Tisza's party, who has been ahead of Fidesz in the polls for months, said that this plan is “synonymous with treason” and called the government to suspend the transaction.

From Budapest Jakub Bawołek (PAP)

JBW/ Szm/