Liberty Steel’s Polish plant faces bankruptcy

By Metal miner

Big changes seem on the way for the Polish steel industry. Local steel news outlets recently reported that several companies have expressed interest in leasing Polish plate maker Huta Cz?stochowa, which Liberty Steel acquired in 2021 after a local court declared the factory bankrupt in July .

Potential suitors for the plant include Ukrainian metals and mining group Metinvest. “We can confirm that we have been invited to consider leasing the steel plant, with the possibility of purchasing it later,” Metinvest’s commercial director Dmitriy Nikolayenko told ?ycie Cz?stochowy daily on August 15. “Currently, we have no “We have no information on the condition in which the previous owner left the site. We need to conduct a thorough assessment, including a comprehensive due diligence study, which will determine the date of the steel release,” Nikolayenko added.

Metinvest officials were not available for comment despite several attempts. Other parties interested in leasing Huta Cz?stochowa include Katowice-headquartered coal producer W?glokoks, which has stakes in other Polish rolling stock. An official from that company would only tell MetalMiner that the company is looking into the possibility and declined to comment further.

Metinvest could expand capacity outside of Ukraine

Information on the group’s website showed that Metinvest’s assets outside Ukraine include Italian plate producers Ferriera Valsider and Metinvest Trametal. The latter is located in the Friuli Venezia Giulia region and has a capacity of 600,000 metric tons per year to roll slabs in 4-180 mm and a maximum width of 3200 mm.

Ferriera Valsider, in the Veneto region, can run up to 400,000 metric tons per year of heavy plate with 8-200 mm gauge and widths up to 3,000 mm, as well as 600,000 metric tons of HRC with 1.8-gauge 25 mm per year, up to a maximum. width 1,555 mm.

Huta Cz?stochowa is located 80 kilometers north of Katowice, the capital of the Silesian Voivodeship, and can produce approximately 1.2 million metric tons per year of 5-20 mm gauge sheet on two rolling mills. Information on Liberty Steel’s website indicated that the factory’s products target wind towers and non-pressurized tanks.

Yellow goods, construction, as well as water transport and vehicle sectors are also targets for Huta Cz?stochowa production. In addition, the factory can produce welded pipes in diameters of 1,000-3,000 mm.

The factory has a checkered financial history

The Cz?stochowa District Court placed Huta Cz?stochowa into bankruptcy on 25 July. Reports in Polish media and steel news said this was because the plant had not been operating for six months and had received no new orders. A source at GFG Alliance told MetalMiner that the plant was operating at minimal levels at the start of the year, but worsening market conditions in Europe created cash flow problems.

Plate produced in northern Europe is currently around €605 ($675) per metric ton EXW, down from €700 ($780) at the start of the month. This is partly due to lower seasonal demand in the European summer as well as lower input prices.

The current bankruptcy is not Huta Cz?stochowa’s first. Indeed, the same court that announced the current bankruptcy also placed the factory in bankruptcy in September 2019 after its board filed for bankruptcy in June.

Liberty hopes to maintain its positions in the steel industry

Sunningwell International Polska has expressed interest in taking over the lease of the factory in 2019 after the Polish courts previously declared the factory bankrupt. The company withdrew from the planned sale in 2020, after which Liberty Steel acquired it for the sum reported by z?. 190 million ($43.3 million).

Liberty Steel initially took over the lease for Cz?stochowa in December of that year and then fully acquired the plant in May 2021. Liberty’s parent company, GFG Alliance, said on August 15 that it had filed for bankruptcy proceedings .

“Liberty is attractive because it believes the business has proven it had strong support from its largest lender, had a letter of intent from a credible financial institution for a €100m working capital loan ($111 million) and was already undergoing a restructuring and reboot. process,” the company said in an announcement.

“Liberty’s appeal also highlights a number of due process issues that have a significant impact on the validity of the proceedings,” the company said.

By Christopher Rivituso

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