Luxembourg government eyes Liberty Dudelange acquisition, site repurposing
The Luxembourg government has submitted an acquisition offer to the court-appointed liquidator for bankrupt galvanizer and service centre Liberty Steel Dudelange. It aims to repurpose the site for another use and not resume steel operations.
According to Luxembourg’s Ministry of Economy, following nearly three years of production stoppage, the site presents a strategic opportunity for redevelopment. The objective, according to a ministry note obtained by Kallanish, is to optimise land use and repurpose the facility to support industrial renewal and drive economic growth.
“If this offer is accepted, the Ministry of the Economy will proceed with the development of the land with the aim of establishing new industrial activities and promoting the creation of high value-added jobs. The government will also consider the possibility of dedicating part of the site to defence-related projects,” the note says.
No other buyers have emerged for the Dudelange site, nor for Liberty Steel’s Liège facility. Despite ongoing efforts to identify potential investors, both sites remain without viable acquisition prospects, largely due to structural challenges in the European steel market and restrictive trade conditions.
In May, the sales process for the Dudelange plant was suspended after rumoured bidder Tosyali reportedly withdrew its interest. A recent visit by another potential buyer reportedly took place at the Dudelange site, though the interested party is also said to be based outside the EU.
The EU quota system is a major obstacle to any acquisition of both the Dudelange and Liège sites. The fundamental issue lies in its restricted ability to import hot rolled coil feedstock from outside the EU, which significantly undermines the site’s competitiveness and operational viability.
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Luxembourg government moves to acquire insolvent ex-Liberty Dudelange plant
“In the context of the bankruptcy of Liberty Steel Dudelange, the Government Council has decided to submit an offer to the trustee to acquire the site,” the Ministry of Economy said in a press release.
“After almost three years of inactivity, the site can be redeveloped in a way that maximizes the use of available space and finally gives it a new purpose to contribute to economic development,” the ministry added.
In 2019, Liberty Steel acquired the Dudelange site, along with several other European steel assets, from ArcelorMittal. Almost all of those acquisitions have faced insolvency or closure in recent years.
The plant in Dudelange is capable of producing around 1 million tonnes per year of galvanized products from both electro-galvanizing and hot-dipped galvanizing lines, according to Fastmarkets’ information. There are two hot-dipped galvanizing lines with combined capacity for 620,000 tpy and two electro galvanizing lines with combined capacity for 360,000 tpy, according to Liberty Steel’s website.
There are 185 workers employed at the Dudelange plant, which lies in the south of Luxembourg, which itself is between France, Belgium and Germany.
The asset was part of Liberty Steel Belgium, along with Liberty Liège, which comprises the Flémalle and Tilleur production sites in Belgium, each producing cold-rolled coil, hot-dipped galvanized coil and tinplate.
In December 2024, the Dudelange plant was declared insolvent and a receiver was appointed, while the Belgian assets entered a process of liquidation.
Liberty Steel’s attempts to organize a reacquisition faltered. Then, in February this year, Turkey’s Tosyali Steel submitted an offer for the potential acquisition of the Dudelange plant, but Fastmarkets understands that the deal did not progress beyond that initial stage.
“If this offer is accepted, the Ministry of Economy will develop the land with a view to developing new industrial activities and promoting the creation of high-value jobs. The government will also examine the possibility of dedicating part of the site to defense-related projects,” the Ministry of Economy said.
Because no other potential buyer has emerged, industry sources familiar with the matter said that the chances were high that the Dudelange site would be nationalized.
Galvanized coil is mainly used in the automotive and construction industries. But these products are also used in the military industry, mainly for their corrosion resistance and durability in extreme conditions. Applications include structural elements, vehicle components and essential parts such as chains and anchors for landing craft.
Unions call for emergency meeting as Liberty Dudelange sale collapses
Luxembourg trade unions OGBL and LCGB are demanding an emergency meeting with the economy and labour ministers after Tosyali withdrew from its proposed acquisition of Liberty Dudelange.
“It is imperative that all parties involved immediately come together to define clear, concrete, and immediate solutions for employees,” the unions say in a joint note seen by Kallanish.
The unions previously proposed the establishment of a sectoral redeployment unit, based on the “CDR” model used successfully within the tripartite framework of the steel and aviation industries.
“Beyond employees, the country’s industrial future is also at stake. Measures must be taken to preserve threatened production facilities, especially when their viability has been proven. Luxembourg cannot afford to lose its expertise or see its industrial capabilities erode amid indifference,” the unions add.
Tosyali could not be immediately reached for comment.
The Turkish steelmaking group emerged as a potential buyer for bankrupt Dudelange in February. The unit has approximately 140 employees following a reduction in staff. It has remained inactive for more than two years, with the exception of a production test conducted in July 2024.
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Tosyali emerges for Liberty Steel Dudelange facility
The bankrupt Liberty Steel Dudelange facility’s receiver has communicated to trade unions that a decision has been reached on the buyer for the plant, informed sources tell Kallanish.
The prospective buyer is a Turkish steelmaking group that shares the same objective as the Luxembourg government – a commitment to finalise the transaction promptly to facilitate the resumption of production, according to sources.
The buyer could be Tosyali, which was reported last month to be seeking to acquire a European steel producer, citing the challenges faced by EU-based mills reliant on coal-based production. The company’s strategy involves supplying semi-finished products to downstream manufacturers rather than competing directly with final products in the EU market.
Tosyali did not respond to request for comment before deadline on Friday.
The Luxembourg government aims to maximise financial recovery to address Liberty’s outstanding debt, with the government itself among the creditors due to various employee-related expenses incurred by the previous owner. The government maintains ownership of the land and is expected to grant new concession rights to the prospective owner.
The asset will be sold instead of being transferred without compensation. The facility is said to be in good condition, as some personnel have worked to ensure maintenance. The equipment remains up-to-date and production tests have been successfully executed.
Theoretically, after all paperwork is signed, the buyer will be able to quickly resume production thanks to minimal bureaucracy. The selection made by the receiver must undergo validation by the judge responsible for overseeing the sales process. A source indicates this process may require a few days to complete. Following the state’s approval of the judge’s and receiver’s ruling, the facility will be transferred.
Dudelange currently has approximately 140 employees following a reduction in staff. The facility has remained inactive for more than two years, with the exception of a production test conducted in July 2024.
The Luxembourg commerce tribunal declared the Dudelange facility bankrupt last December (see Kallanish 4 December 2024). In addition to Dudelange, Liberty plans to divest its Magona facility in Italy and its Belgium-based Liege plant. The three businesses combined possess rolling capacity exceeding 2.5 million tonnes/year.
The Magona facility is currently operational following the procurement of hot rolled coil feedstock, while Liege is said to be on the verge of bankruptcy.
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Authorities speed up Dudelange sale
Multiple companies have expressed interest in Liberty Steel’s Dudelange facility, according to informed sources speaking to Kallanish.
The primary goal of the government and the receiver is to find a potential buyer. A source suggests the Luxembourg government estimates the Dudelange plant’s bankruptcy procedure will take approximately three months. The receiver, Olivier Wagner, will negotiate a potential price in collaboration with the presiding judge overseeing the case, with assistance from the government. The latter holds ownership of the land and is expected to grant new concession rights to the prospective owner.
According to rumours, Italian service centre Eusider has shown interest in acquiring Dudelange, alongside other prospective buyers. Eusider and Liberty declined to comment.
Last month, the OGBL and LCGB unions urged the Luxembourg government and the European Commission to take immediate action aimed at securing the long-term viability of the site.
Since Liberty Steel did not fit the requirements set by the Luxembourg state to be eligible for temporary layoffs, the government has not supported Dudelange until now. As a result, Liberty Steel took on the responsibility of covering all wages and costs. In October and November, the group did not fulfil its obligation to pay salaries to its workforce.
Last week, the Luxembourg commerce tribunal declared the Dudelange facility bankrupt. The plant has experienced a period of inactivity spanning approximately two years. A union source indicates that the 147 workers at Dudelange had been anticipating the tribunal’s decision.
Another union source indicates the state will now assume responsibility for salaries. In addition to Dudelange and its Belgium-based Liege plant, Liberty plans to divest its Magona facility in Italy. The businesses combined possess rolling capacity exceeding 2.5 million tonnes/year.
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Liberty Steel officially bankrupt in Dudelange
The bankruptcy of Liberty Steel’s Dudelange site was declared by the Luxembourg Commercial Court. 147 jobs are at stake.
Neither the local management nor the company’s lawyers were present at the Luxembourg Commercial Court at 9am on Friday 29 November. However, Liberty Liège-Dudelange and its Luxembourg site were declared bankrupt after the management admitted that it was in suspension of payments. Olivier Wagner was appointed receiver in front of a few journalists and the LCGB union’s deputy general secretary, Robert Fornieri, who had made the trip.
“The most urgent matter is the employees, who are entitled to their back pay for October and November,” commented Wagner as he left the court. “They will be entitled to their severance pay under the Labour Code, which corresponds to the month of the bankruptcy, the subsequent month, i.e., December, and half the notice period to which they would have been entitled in the event of conventional dismissal.”
A recovery to avoid the real state of bankruptcy
“Everything will be checked by me under the supervision of the supervisory judge, the files will then be sent to the employment administration. We must wait for the date of verification of the claims, which is set in the judgment for January 17, for it to be ratified and sent to Adem,” continued the new receiver. But since employees cannot wait several weeks without pay, the unions will try to find an accelerated procedure to release certain amounts.
“Contacts have already been made with the ministries. For us, the most important thing is the situation of the 147 employees and their salaries, there is still a long time to go before a single euro arrives in the employees’ bank accounts. The ministry of labour must help us, as it promised us this week”, said Fornieri.
“We will have to react very quickly and quickly get in touch with the receiver. We could perhaps be heading towards an unfinished bankruptcy if buyers act in the meantime to transfer the employment contracts to new ones. Because if we really enter a state of bankruptcy, employment contracts and activity cease, and this is a danger for the installation, especially in winter. This would make any possible recovery difficult,” added the deputy general secretary of the LCGB.
Written by Ioanna Schimizzi
Source: paperjam.lu
