Sunningwell readies to acquire Huta Czestochowa

Sunningwell International Polska is set to acquire Huta Czestochowa (HCz) after its tender bid for the Polish plate mill was accepted by the Czestochowa district court, an official at the investment firm tells Kallanish.

The winning bid of PLN 220 million ($58.5m) was made by Sunningwell Steel Polska, a holding set up by Sunningwell in 2019 to operate steel assets acquired in Poland, Romania and potentially other Central and Eastern European countries.

Sunningwell, which has been leasing insolvent HCz since last September, was the only company to make a valid bid in the tender to sell the plate mill. Another bid came in from Liberty Steel-owned Corween Investments, which also participated in last year’s sales process for HCz. However, this bid came in after the deadline and did not contain the required deposit, resulting in it being rejected by the court. The Sunningwell official says it was Liberty’s intention to prevent the acquisition of HCz.

Electric arc furnace-based HCz has a 1.2 million tonnes/year capacity of heavy plate.

Sunningwell also previously acquired Romania-based Otelu Rosu Mill and Laminorul Braila Mill through its Laminorul Danube Metallurgical Enterprise subsidiary. It was on the verge of acquiring Combinatul de Oteluri Speciale (COS) Targoviste earlier this year but the transaction was delayed by an objection to the deal from one of Targoviste’s creditors (see Kallanish passim).

Laminorul Danube then agreed to lease Targoviste for one year starting from 1 April or until the creditor’s appeal had been resolved. Then the Covid-19 pandemic struck and forced Sunningwell to invoke force majeure in the lease contract and suspend its execution. The Polish firm intends to complete the lease agreement once Covid-19 complications ease, the official confirms.