Bankrupt Romanian wire producer faces new auction: reports

Romanian steel wire producer Dan Steel, based in Beclean, which has been in bankruptcy proceedings since the beginning of the year, will undergo another auction round, at a lower asking price, according to Romanian media reports.

CITR Cluj Branch, together with Prime Insolv Practice, as judicial liquidators, are organising the auction later this month. The starting price of the auction is €23 million ($25m), down from €25m and €28m in the previous auctions respectively.

CITR did not reply to Kallanish request for comment before deadline.

In April, it said its aim is to attract potential investors to bring the plant back to life, as one of the main employers of the city of Beclean (see Kallanish passim).

Dan Steel Group was active in the production of wire and wire products, with a production capacity exceeding 100,000 tonnes/year. The asset comprises over 40 hectares of land, buildings with a total usable area of ​​75,460 square meters and related equipment.

Dan Steel produces a range of carbon and galvanized steel wire, as well as welded mesh, fencing and nails. The company imported feedstock from Ukraine, Italy, Poland, Belarus and Moldova, from suppliers such as ArcelorMittal, Metinvest, Belarussian Steel Works and Moldova Steel Works. The firm’s main competitors are IS Campia Turzii, Ductil Steel Buzau, and Metalicplas. The main export markets in 2019 were Hungary and Slovakia.

In 2019, the firm suffered from weaker domestic demand compared to 2018 and had planned to increase exports to new markets after shipments abroad also declined on-year (see Kallanish passim). Production fell 26% on-year in 2022 to 31,994 tonnes.

In 2020, Dan Steel was directed into insolvency proceedings following a request from creditor Unicredit Leasing Corporation.

The company has accumulated debt of over €35m, which has created additional pressure on its financial situation.

Svetoslav Abrossimov Bulgaria