The Commercial Court of Liège in Belgium has rejected a restructuring plan for Liberty Steel’s Belgian assets and ordered the liquidation of its Liberty Liège subsidiary, Fastmarkets understands.The court proceedings involved Wallonia district-owned investment company Sogepa and local trade unions, according to local media reports.
In June 2021, the management of Liberty Liège secured a loan through Sogepa for the further development of the business. And from September, the company was in negotiations to sell a 49% stake in the Liege operations to Sogepa in an exchange for further financial aid, sources told Fastmarkets.
The problems with Belgian assets were preceded by turmoil surrounding a creditor of Liberty Steel’s UK-based parent company, the GFG Alliance.
Liberty Liège comprises the Flémalle and Tilleur production sites in Belgium, which each produce cold-rolled coil, hot-dipped galvanized coil and tinplate.
Liberty Steel said it was “disappointed” with the court’s decision of Wednesday April 13 and said it would appeal.
“We continue to believe our transformation plan provides the business with a long-term, sustainable future and preserves 650 jobs,” a Liberty spokesperson said.
The Tilleur site can produce 200,000 tonnes per year of CR steel and tinplate, while Flémalle operates two galvanizing lines with a capacity of 950,000 tpy, producing hot- and cold-rolled galvanized steel.
The packaging line in Tilleur was restarted on February 14, 2022, while the galvanizing lines in Flemalle have remained idle since December 2021 due to a lack of feedstock.
Liberty’s plan for the sites includes developing a new business model for the tinning line at Tilleur, including closer partnerships with major customers to manufacture specialist packaging, and using the G5 galvanizing line at Flémalle to generate short-term profits.
Liberty’s parent company, GFG Alliance, claims to have provided funding of more than €80 million to Liberty Liège since July 2019, €28 million of which has been provided since December 2021, according to a statement from the company seen by Fastmarkets.
GFG’s said its long-term investment plans for the Belgian plants were undermined by the poor steel market in 2019 before the business was adversely affected by the impact of the Covid-19 pandemic, along with the related supply chain disruption, and now by the war in Ukraine.
And investigations into GFG Alliance’s main financier, Greensill Bank, have also affected the company’s plans, Fastmarkets understands.
Liberty acquired the Liege sites from ArcelorMittal in 2018.
Published by: Julia Bolotova