Czech government reminded of the legal consequences of the situation with Liberty Ostrava

Czech Minister of Industry and Trade Josef Sikela sent a letter to British Liberty Steel with an urgent request to save Liberty Ostrava steel mill. This was reported by České noviny.

The official also warned of possible legal consequences of violating the company’s management responsibilities, including financial liability in the event of bankruptcy.

Sikela called on the management of the steel plant to quickly return the money that the company’s owners had transferred to related companies in the past in the form of receivables. He also asked for information on how to resolve the current crisis at the plant.

«The main theme of the letter is the government’s interest in maintaining production and employment at Liberty Ostrava, and it confirms the fact that most of Liberty Ostrava’s liabilities arose within the Liberty Steel group,» said Marek Vosahlik, head of the ministry’s press service.

He added that Czech law requires members of the company’s bodies to act with economic prudence, which is key to good and responsible management, especially in the event of financial difficulties similar to those faced by Liberty Ostrava.

Last December, Josef Sikela met with representatives of Liberty Ostrava. In his turn, Czech Finance Minister Zbynek Stanůra said during a recent visit to Ostrava that the government had not seen the company’s restructuring plan. Liberty Ostrava was obliged to submit it to a local court after it filed for protection from creditors.

Liberty Ostrava has been facing a decline in demand for some time now and has been having trouble paying off its debts. Employees of the steel mill and the energy supply company Tameh Czech (about 6,000 people in total) have been at home since December 22 last year, and most operations have been suspended. The date of return to work for the plant’s employees has been postponed several times.

Last week, Liberty Ostrava filed an objection to the court ruling ordering it to immediately pay Tameh CZK 500 million. According to the energy supply company’s spokesman, Patrick Schober, the standard proceedings are likely to begin in the Ostrava District Court, and it could take a long time.

Liberty Ostrava spokeswoman Kateryna Zaichkova said that blast furnace No. 3 cannot be restarted without resolving the situation with the energy supplier. Earlier, she said that negotiations were underway with Tameh and its insolvency officer. Schober noted that Liberty is very passive in this process.

As GMK Center reported earlier, in mid-January, the timing of the restart of the Czech steel mill Liberty Ostrava remained uncertain. The largest steelmaker in the Czech Republic has been at a standstill since December 22 last year. At that time, its sole electricity supplier, Tameh Energy Czech, stopped supplying electricity due to the accumulation of unpaid bills by the company.