Liberty Steel, which previously started the process to sell French steel producer Ascoval and rail producer Hayange, has received buying interest from several companies, including steel mills and private equity firms, a source close to the matter told S&P Global Platts.
Liberty has appointed Rothschild & Co to oversee the sale, the company said in a statement to Platts. The move comes amid the metal group’s ongoing financial troubles after its main financier Greensill Capital filed for bankruptcy in March.
“Liberty Steel France, which incorporate, LIBERTY Ascoval and LIBERTY Rail Hayange, has faced a significant reduction in working capital support since the collapse of Greensill Capital. Given the strength of the steel market and the high quality products we produce, we remain confident that we can secure new financing,” a Liberty Steel spokesman said in a statement to Platts.
“At the same time, we are taking prudent steps to explore sale options for these businesses and will be inviting interested parties to submit offers. Through this process we will collaborate with stakeholders to evaluate options and identify the best possible solution for the businesses and their employees,” the statement added.
The company declined to comment further about the sale, the production and the deal with the French government.
Five European mills, one non-European mill and two private equity firms have already expressed some interest in the mills for the first stage of the sale process, according to a source close to the matter.
Both the companies continue to operate normally, with Ascoval producing 25,000 mt of steel a month, of which 80% goes to Hayange, sources said.
The French government in March loaned Eur20 million to the two plants to cover working capital and capital expenditure costs, according to sources. At the time, the French government obligated Liberty to refinance operations by the end of May with additional Eur20 million, and put the two companies for sale in case it failed to refinance, sources said.
Liberty House bought Hayange, which was formerly part of the British Steel group, in August. Ascoval was previously controlled by Greybull Capital, the private equity firm that also owned British Steel, with Liberty buying Ascoval around the same time. Chinese steelmaker Jingye bought British Steel’s UK and Dutch assets last year after the UK-based steelmaker went into liquidation in May 2019. Hayange, however, was not included in this transaction.
The French government had put Hayange up for sale in 2019 separately as it considered the company a strategic asset. The government put in charge the Tribunal of Strasbourg for the sale.
Rothschild and the French government did not reply to Platts inquiry. Hayange produces between 250,000-300,000 mt of rails a year, most of them for France’s state-owned railway company, SNCF.
— Annalisa Villa
