Sunningwell renews lease at Huta Czestochowa plate mill, operations continue

Sunningwell International Polska has renewed its lease of Polish heavy plate producer Huta Czestochowa and remains interested in buying the mill despite a failed previous attempt, Marek Frydrych, the Warsaw-based investment firm’s board president, said Oct 15.

The new lease, which gives Sunningwell the operational control over Huta Czestochowa, is valid between Oct.14 and June 30, 2021, Sunningwell said in a statement. It has been the leaseholder of the mill since September 2019.

“The lease renewal means “the company will continue its operations as normal and can keep taking and fulfilling orders,” Frydrych said.

The mill is waiting for its trustee in bankruptcy to call for a new tender or an auction in the next week or so. The previous sale failed to conclude earlier this month after the only bidder – Sunningwell – refused to pay Zloty 220 million ($58 million) for the mill due to legal issues, Frydrych said.

Sunningwell is continuing talks to buy the mill, he added.

Huta Czestochowa’s operations are at a level significantly under its annual capacity of 800,000 mt of plate: January-September, the mill produced 200,000 mt slabs, 164,000 mt heavy plate and 25,000 mt prefabricated steel goods.

With the renewed lease Sunningwell will keep production going at the mill. However, the target of 300,000 mt/year slab output, allowing for reaching profitability, seems unlikely to be achieved this year, Frydrych said.

— Wojtek Laskowski