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.
Natalia Capra France , Elina Virchenko UAE
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.
Natalia Capra France
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
Liberty’s Ostrava sale garners mostly local interest
The sale of Liberty Steel’s Czech Ostrava iron and steel works has garnered interest from a number of parties, mostly local but including Indian company Jindal Steel, a delegation from which showed up at the mill in May, industry sources said June 18.
Other potential buyers included Trinecke Zelezarny, another major steel producer in the Czech Republic with a capacity of 2.5 million-2.6 million mt/year, Czech industrial holding CE Industries (CEI) known in the steel industry for having provided Czech third-largest steel producer Vitkovice Steel with tolling financing, and Czech energy company Sev.en Group, the sources said.
Liberty Steel declined to discuss the sales process and the above-named entities were not available for comment.
Given the ongoing risks and uncertainties, Liberty Steel last week announced a sale of Ostrava and its judicial reorganization under the Insolvency Act.
It had worked on several restructuring plans for Ostrava, including a mid- to long-term transition to electric arc furnace technology.
In April, Sanjeev Gupta, head of GFG Alliance, an umbrella group which Liberty Steel is part of, met Czech finance and industry ministers but the latter found the plans “weak” and “unconvincing” with no breakthrough achieved on the mill’s restart, sources said.
Steel production at Ostrava was halted in the fourth quarter of 2023 when Liberty Steel in October idled blast furnace No. 3, the last remaining operational BF at its Ostrava steelworks, citing poor demand in Europe as the main reason.
Some downstream mills continued rolling, using up previously acquired semi-finished steel stock. Ostrava’s blast furnace No. 2 was idled in July 2022 for repairs and an upgrade but has never been restarted.
Ostrava’s restructuring was hampered by external factors, primarily a further deterioration of market conditions in Europe, an indefinite delay in the allocation of emissions allowances to the business from Czech authorities, Liberty Steel said, adding Ostrava was filing for a judicial reorganization which will provide the time and protection to undertake its sale.
The sale decision was in the best interests of Ostrava’s creditors, employees and customers, said Liberty, which intends to maintain the few assets which cover their own costs and support employees in applying for the state’s Wage Guarantee Scheme.
The Ostrava plant is the Czech Republic’s biggest steel producer capable of making up to 2 million mt/year at full steam. Liberty Steel acquired it from ArcelorMittal in July 2019. After years of underinvestment, it says it injected Eur143 million ($153 million) in the plant and led to its best performance in a few years in 2021-22.
In 2021, Ostrava produced a five-year high of liquid steel at 2.28 million mt with the plant’s two blast furnaces producing 1.93 million mt of hot metal during the year, but last year, its steel production declined to 1 million mt, according to local media reports.
Katya Bouckley
Liberty Steel hints at preparing Hungary’s Dunaferr for green transition after acquisition
“The iron and steel works [of Dunaferr] has been saved, but now needs to be repaired and prepared for a sustainable long-term future,” according to a letter from Liberty Steel’s European chairman Ajay Aggarwal and its chief investment officer Sandip Biswas.
Just over a month ago, UK-registered Liberty Steel won the tender for Dunaferr. However, the sale is not yet completed, as the European Commission has yet to approve the acquisition, making the liquidator exercise ownership rights and take strategic decisions.
A spokesperson for Liberty Steel declined to comment on the content.
The letter mentions the understanding between the liquidator and Dunaferr’s management in relation to the challenging European market conditions and specifically high levels of foreign steel imports into the EU, high energy prices, and additional costs in meeting EU carbon emission standards, and the necessity to pause steel production as these conditions persist.
The liquidator has therefore agreed to Liberty’s suggestion to temporarily and for an unspecified period stop steel smelting and take offline blast furnace No. 2 — the last operational of the two BFs at the plant — and reduce the operation of the coke plant to a technological minimum, according to the letter. However, the rolling mill continues to process slab stocks, the letter added.
Liberty Steel since the end of 2022, when Dunaferr was in a bad state amid its major facilities shut down, has worked closely with the liquidator, helping the restart of Dunaferr’s blast furnaces and coke ovens, in addition to steel production and rolling mills.
Previously, Liberty Steel informed the market of the green transition in the works for its other major Eastern European mill and Romania’s largest steelmaker Liberty Galati. Just over a year ago, Liberty said it was about to hold a tender to select a supplier of hybrid electric arc furnace technology needed to produce low-carbon steel at Galati, but this was never completed.
Liberty Steel to idle Dunaferr blast furnace
Liberty Steel is idling the remaining working blast furnace – no.2 – at Dunaferr because production costs are not economically feasible amid the current low steel prices, informed sources tell Kallanish.
The global steelmaking group acquired the insolvent Hungarian steelworks in an auction last month (see Kallanish passim).
In a letter to Dunaferr employees last week, management wrote: “The mill has been saved, but it should be put in order, to be prepared for a sustainable and green future to provide working places for those working at the mill. We are now working on the plan to switch to the production of GREENSTEEL, and as soon as approval from EU authorities is given, the work can begin.”
The letter also says Liberty will continue to pay the salaries of employees, while it develops retraining programmes, according to its legal obligations. The furnace shutdown is expected to last three months.
Liberty declined to comment.
BF2 was restarted in February after being idled last year amid Dunaferr’s well-publicised financial troubles.
According to reports last month following Liberty’s Dunaferr acquisition, investment exceeding $100 million will be required to regain the steelworks’ environmental protection permits necessary for operation.
In 2020, the last year for which Dunaferr published production data, it recorded crude steel production of 1.18 million tonnes, despite widely reported operational problems in the second half of the year. This was down 19% on-year. The firm’s BF1 remains idle since last summer.
Adam Smith Poland
