The Liège Enterprise Court has ruled that Liberty Steel’s Flémalle and Tilleur plants in Belgium must be restructured, with a provisional administrator and a legal representative appointed by the court to eventually oversee the sale of the plants.
“We can confirm that Liberty Steel Group, the management team of Liberty Liège and its unions jointly requested the Liège Enterprise Court’s opening of a judicial reorganization via transfer of business procedure for its Liège plants, which has now been granted,” a Liberty Steel spokesperson said in a statement sent to S&P Global Commodity Insights Dec. 5.
The judicial reorganization proceedings, or PRJ, would initially run until April 30, 2023, and would temporarily protect the business from its creditors while ensuring the best possible ongoing relationships with them, and ensure the continuity of the company, he said.
“The company’s management team, its unions and the court appointed administrators will now work collaboratively with other stakeholders to identify and realize strategic options for the business, including its sale,” the spokesperson said.
Liberty, part of the GFG Alliance, took over the Flémalle and Tilleur plants in 2018 and previously in May won its appeal against the Liège Enterprise Court’s decision to appoint administrators to the plants.
At the time, Liberty said it would be assisted by a mediator to support the restart of the plants and help it work with unions to implement its business plan.
However, the matter went back to court after workers at the plants requested a restructuring.
Liberty had invested more than Eur140 million ($147.4 million) at the Liège plants since July 2019, the spokesperson said, adding that of the total, more than Eur28 million has been provided since December 2021 to keep the plants operationally capable.
“Since the beginning of the year the European steel industry has been severely impacted by the very high energy prices with the additional taxes in Wallonia impacting Liberty Liège’s operating margins, while the overstocking by customers at the start of the war in Ukraine, combined with rising EU imports, has led to a collapse in customer demand,” he added.
Steel prices have been weak in the second half of 2022, with Platts assessing domestic HRC prices in Northern Europe at Eur615/mt ex-works Ruhr Dec. 2, down 33.3% since the start of 2022, S&P Global data showed.
The two plants have been idled for a number of weeks due to these factors, with the Flémalle steel galvanizing lines previously having been at a standstill since December 2021 due to a lack of feedstock and the ongoing restructuring process Production at the 200,000 mt/year tinning line at Tilleur was previously restarted in H1 after three months of maintenance work on the line and intermittent disruptions in raw material supplies, as previously reported.
In mid-November, Liberty reached an agreement to restructure its global debt with some of its main creditors, although it is still negotiating debt restructuring for its European business.
The group signed a term sheet with parties responsible for the main creditors of Greensill Capital, Greensill Bank and Credit Suisse Asset Management, its Restructuring and Transformation Committee said in a statement, adding that this was “a major step in the group’s refinancing.”
However, it did not provide an amount for the debt restructuring.
GFG’s main financier Greensill Capital collapsed in March 2021.
— Jacqueline Holman
