Sunningwell plans to use preemptive right to buy Huta Czestochowa

The investment company Sunningwell International Polska is planning to make an offer to buy the Polish heavy plate mill Huta Czestochowa at the end of July, Marek Frydrych, Sunningwell’s president, said July 20.

Frydrych told S&P Global Platts that Sunningwell is will exercise its preemptive right to buy the mill as its current operator and leaseholder.

The first tender, closed on June 3, was inconclusive as no valid offers, not even from Sunningwell, were submitted.

Local media in Poland reported that other companies showing interest in Huta Czestochowa were the Liberty group and Metinvest.

The new starting price for Huta Czestochowa, currently under bankruptcy and controlled by the receiver, has been set at Zloty 220 million ($56 million), down Zloty 30 million from the initial asking price. Interested parties can submit their offers by July 27.

Frydrych said he believes the targeted price of Huta Czestochowa is greater than the real value.

“The lack of maintenance and modernization work at the mill is visible; a lot of equipment and machinery needs to be replaced or upgraded,” he said. “The valuation of the mill reflects more the balance sheet than the real situation. We’ll probably overpay for the mill; we could bid a lower price, but the tender is restricting the minimum level.”

The mill’s recent monthly output fell to 35,000 mt heavy plate, lower than planned, due to the negative impact of the coronavirus pandemic on the steel demand. During more prosperous times, the mill could supply 50,00 0mt of heavy plate per month.

Huta Czestochowa remains under lease by Sunningwell until Sept. 19.

— Wojtek Laskowski