Polish financing provider makes offer for Huta Częstochowa

Idled Polish plate producer ISD Huta Czestochowa has received a takeover offer from Warsaw-based Sunningwell International Polska, a representative of the bidder told S&P Global Platts Friday.

“It’s true that the Sunningwell company made an offer to ISD Huta Czestochowa. We will be able to tell you more after they accept our offer,” the representative, Agnieszka Leszczynska, said.

On its website, Sunningwell describes itself as the Polish platform “for financing trade, financing the purchasing of goods, raw materials and semi-products by companies from Poland on foreign markets.” The company boasts that it is well linked with Asian markets, but it is unknown in the steel industry.

According a trade union representative at Huta Czestochowa, a court supervisor and creditors are evaluating the offer and should decide in the next few days whether to accept it.

Huta Czestochowa is under pressure to find a new investor quickly to avoid insolvency. A source close to the mill said that in order to ensure the steel mill’s continued operations, it needs to find an investor. In the event of insolvency, the mill would confront being auctioned piece by piece, while its workforce of 1,200 would face dismissal.

Another prospective investor, global company Liberty Steel, is said to still be interested in buying Huta Czestochowa, but according to a source at Liberty, it needs more time to figure out how the Polish mill would fit into Liberty’s business model.

The trade unionist noted that the mill “cannot lose any more time” as production has been idled for four months and workers have been on 60% of their salaries. If the offer from Sunningwell is accepted, Czestochowa can look at a production restart in about a month, the unionist added.

An Eastern Europe-based industry source told Platts that “the deal — if it happens or not — depends on whether the creditor-banks will take [Sunningwell], without any reputation in the steel sector, and its offer, at face value.”

“The cost of the transaction will play a role, too. As far as I know, the banks wanted to get $56 million,” he said, but so far they have not found an investor willing to pay that much. He added that a real change is only possible if Huta Czestochowa goes to a company with expertise in the steel industry that has the technical resources to carry out the mill’s renovation.

“If it continues under the current management, the takeover makes no sense,” he said.

— Wojtek Laskowski, Katya Bouckley