The sale of Liberty Steel’s Czech Ostrava iron and steel works has garnered interest from a number of parties, mostly local but including Indian company Jindal Steel, a delegation from which showed up at the mill in May, industry sources said June 18.
Other potential buyers included Trinecke Zelezarny, another major steel producer in the Czech Republic with a capacity of 2.5 million-2.6 million mt/year, Czech industrial holding CE Industries (CEI) known in the steel industry for having provided Czech third-largest steel producer Vitkovice Steel with tolling financing, and Czech energy company Sev.en Group, the sources said.
Liberty Steel declined to discuss the sales process and the above-named entities were not available for comment.
Given the ongoing risks and uncertainties, Liberty Steel last week announced a sale of Ostrava and its judicial reorganization under the Insolvency Act.
It had worked on several restructuring plans for Ostrava, including a mid- to long-term transition to electric arc furnace technology.
In April, Sanjeev Gupta, head of GFG Alliance, an umbrella group which Liberty Steel is part of, met Czech finance and industry ministers but the latter found the plans “weak” and “unconvincing” with no breakthrough achieved on the mill’s restart, sources said.
Steel production at Ostrava was halted in the fourth quarter of 2023 when Liberty Steel in October idled blast furnace No. 3, the last remaining operational BF at its Ostrava steelworks, citing poor demand in Europe as the main reason.
Some downstream mills continued rolling, using up previously acquired semi-finished steel stock. Ostrava’s blast furnace No. 2 was idled in July 2022 for repairs and an upgrade but has never been restarted.
Ostrava’s restructuring was hampered by external factors, primarily a further deterioration of market conditions in Europe, an indefinite delay in the allocation of emissions allowances to the business from Czech authorities, Liberty Steel said, adding Ostrava was filing for a judicial reorganization which will provide the time and protection to undertake its sale.
The sale decision was in the best interests of Ostrava’s creditors, employees and customers, said Liberty, which intends to maintain the few assets which cover their own costs and support employees in applying for the state’s Wage Guarantee Scheme.
The Ostrava plant is the Czech Republic’s biggest steel producer capable of making up to 2 million mt/year at full steam. Liberty Steel acquired it from ArcelorMittal in July 2019. After years of underinvestment, it says it injected Eur143 million ($153 million) in the plant and led to its best performance in a few years in 2021-22.
In 2021, Ostrava produced a five-year high of liquid steel at 2.28 million mt with the plant’s two blast furnaces producing 1.93 million mt of hot metal during the year, but last year, its steel production declined to 1 million mt, according to local media reports.
Katya Bouckley
