European commissioner for internal markets Thierry Breton has reassured union representatives over the possibility of a collapse of Liberty Steel in France. In case Liberty’s Ascoval and Hayange mills go into administration, he said in a recent meeting, funds from the EU recovery plan could be used to guarantee continued activity and employment, Kallanish learns from union members.
Fears for Hayange and Ascoval have been prompted by the default in France of three Liberty downstream engineering businesses, which are part of the Alvance Aluminium unit. The aluminium and iron foundries at Poitou and the wheels manufacturing plant at Chateauroux went into administration last week.
A source close to the matter says unions sent a letter this week to French finance minister Bruno le Maire urging the government find a solution. If funds are injected to save Ascoval and Hayange, the government should find a way to shield its financial help from Liberty as the money must remain in France.
The source says that €18 million ($21m) of state-guaranteed loans granted to support the three iron and aluminium plants have disappeared within the large debt that Liberty owes to Greensill Capital. Last month the French government provided Liberty’s Ascoval and Hayange plants with a €20m loan to go towards paying wages and procuring feedstock (see Kallanish 22 March). Both mills currently have full order books and are working at full capacity to satisfy orders from national railway company SNCF.
Among other solutions in case of Liberty’s collapse, unions are proposing temporary nationalisation that will allow time to find a buyer.
A spokesperson for Liberty parent GFG Alliance declined to comment on Ascoval and Hayange.
An Alvance Aluminium spokesperson says the company “took the difficult decision [last week] to apply to have its three downstream engineering businesses in France placed into voluntary administration … All three businesses have faced structural changes in their markets which have been compounded by Covid-19 and a reduction in working capital support available from GFG Alliance following the collapse of Greensill Capital.”
“This decision does not affect or include Alvance’s other sites – Alvance Aluminium Dunkerque in northern France, Alvance Aluminium Duffel in Belgium or Alvance British Aluminium in Lochaber, Scotland – all of which are operating normally, benefitting from strong market positions and are cashflow positive,” the spokesperson adds.
Natalia Capra France