Receiver to put Huta Czestochowa up for sale by mid-April

Polish steel plate producer Huta Czestochowa is to be offered for sale in the coming weeks, a director of the company that manages the mill confirmed to S&P Global Platts Wednesday.

“Huta Czestochowa is now under bankruptcy and the receiver, which owns it, has the obligation to sell the assets to satisfy the creditors,” said Marek Frydrych, managing director of Sunningwell International Polska, the Warsaw-based financial firm that holds the mill’s lease.

The receiver has started to prepare the mill for sale with the formal announcement expected around mid-April, he said.

Sunningwell, which holds Huta Czestochowa under a lease due to expire September 19, intends to exercise its pre-emptive right to buy the mill if the price is right, according to Frydrych.

“The tender [to sell Huta Czestochowa] will end on May 29 and the envelops with bids will be opened on June 3,” an industry source close to the mill told Platts. “The evaluation of offers and selection of the winner might take a couple of months.”

The tender was always going to happen since the court decided to lease the mill for 12 months. The receiver is expecting around four potential investors. Sunningwell will have priority, but even if someone else wins, there will be three months to sign a deal so Sunningwell’s lease will continue until September without any problems, according to the source.

The mill remains operational, but its recent output has not been confirmed. It was targeting 90,000-120,000 mt for the January-March quarter, after having sold 40,000 mt of plate last year since its restart in late October 2019.

“Both the mill’s meltshop and rolling mill are working but its output was definitely not the 90,000-120,000 mt, maybe half of that, in Q1 2020,” said the source. The company still has problems with financing working capital and the plate market has deteriorated. It is probably still loss-making, and would need to produce 35,000-40,000 mt/month of plate to break even, he added.

— Wojtek Laskowski, Ekaterina Bouckley