Liberty Ostrava has been acquired for CZK 3.01 billion ($142.6 million) by a consortium comprising SPV NH Ostrava and SPV NH Koksovna, companies owned by former Czech interior minister Martin Pecina. The transaction, expected to be completed by autumn, is pending approval from the insolvency court and Czech competition authority.
The Ostrava plant’s creditors’ committee and secured creditors unanimously agreed to the transaction, which will result in the retention of 2,500 workers. The sale process was organised by PricewaterhouseCoopers Czech Republic, which approached 230 potential investors – but there was no other interested party, a spokesperson for the insolvency administrator tells Kallanish.
Analyses by both PwC and Deloitte Advisory “concluded that a sale at this price is more advantageous for creditors than an alternative sale of individual assets. The experts also confirmed that the price exceeds the liquidation value of the company,” the spokesperson says.
“I believe that the entire sale process will be carried out in such a way that we can take over the company as soon as possible. From the very beginning, I have been interested in purchasing a running plant with experienced employees, who certainly have a great deal of credit for maintaining production, and we will be able to continue producing steel products. Production at the steel mill will continue in the form of tolling, both by VMT and Donquixote. We will negotiate the specific conditions with representatives of both companies,” notes Pecina.
It is unclear whether the new owner will choose to restart Ostrava’s blast furnace.
According to unconfirmed Czech press reports, the ultimate destination of the Ostrava steelworks will be the Iromet SICAV investment fund, set up by Pecina and invested into by several major industrial players with an interest in running the plant.
Liberty Ostrava entered bankruptcy last year. It restarted production last autumn of road barriers, rebar and seamless pipe on a tolling basis, with square and round billet feedstock supplied by Vítkovice Machinery Trade (VMT) and Donquixote. In February this year, its administrator initiated the sale process.
Adam Smith Austria
