Troubled Romanian steelworks Liberty Galati has filed a new restructuring plan with the Galati Court in Romania and is likely to be put up for auction again, Kallanish learns.
The plan has been submitted by two restructuring administrators, Euro Insol and the CITR Galați subsidiary, according to Romanian media reports.
The key proposal is the sale of the company through open auction. The initial price of the asset is set at €444 million ($522m), according to News.ro reports.
According to the document, selling the plant as a single property complex is considered the most viable option for preserving production operations and jobs.
“The auction is expected to attract a new owner capable of providing the necessary investment in working capital and modernising its facilities,” it adds.
The €444m price has been reduced to 70% of the initial asking price of €709m. This amount is the minimum threshold that will allow for partial repayment of senior creditors. The plan envisions the new investor receiving assets free of historical debt, which should increase the asset’s appeal to major international industry players.
In March, the auction for Liberty Galati did not take place due to a lack of bids.
Liberty Galati did not reply to a request for comment by Kallanish before the publishing deadline.
Liberty Galati is in a difficult financial situation due to high debt and unfavourable conditions on the European steel market. Over the past year, the plant has experienced repeated operational interruptions, including the shutdown of blast furnace No.5 and a shortage of raw materials.
The restructuring administrators note that previous attempts at internal financial recovery have failed to produce the desired results, making a change of ownership a necessary step to prevent bankruptcy. In addition to the sale price, the buyer’s commitment to invest in the green transition will be taken into account.
The plant has annual production capacity of around 2.5 million tonnes of steel for the construction, naval, oil and gas, and power generation sectors. It was acquired by Liberty Steel Group from ArcelorMittal in July 2019.
