Liberty Ostrava
Czech steelmaker Liberty Ostrava, a subsidiary of UK-based Liberty Steel, plans to restart its blast furnace on June 1, 2024, if an agreement is reached with energy supplier Tameh, or on January 1, 2025, if not. This is reported by Argus.Media.
In total, the company offers two restructuring plans, one of which provides for the failure to reach an agreement with energy supplier Tameh Czech. The debt to the latter currently reaches 2 billion kroons (€79 million).
After Tameh, Liberty Ostrava’s largest creditor is Danieli, which was engaged in the installation of electric arc furnaces at the steel plant. Work on this project was suspended due to lack of funds.
According to Plan A, which provides for continued cooperation with Tameh, 25% of the outstanding amount will be paid to the creditors on June 30 this year, and the remaining 75% will be paid from October 2024 to March 2026.
According to Plan B, if the cooperation with Tameh is terminated, the first 25% is to be paid on December 31 this year, and the remaining 75% – from April to December 2025.
In any case, once the current problems are resolved, Liberty Ostrava plans to switch to a single furnace and focus on producing plates and pipes, limiting long products. The transformation of the plant will reduce production costs by more than €200 million per year. Production volumes are planned at 80 thousand tons per month.
According to market sources, the company currently produces coils from slabs imported from Russia and Asia. However, production is below optimal capacity and is unable to ensure sustainable operation and repayment of accounts payable. The plant plans to purchase up to 80 thousand tons of third-party slabs before the blast furnace is launched.
As GMK Center reported earlier, Tameh suspended energy supplies to LIBERTY Ostrava on December 21, 2023, which completely halted the plant’s production. The sole energy supplier stopped operations due to non-payment of bills by LIBERTY.
Recently, the restructuring administration found out that Liberty Ostrava is bankrupt, which puts the previously announced restructuring plan at risk of failure. A proposal to lift the general moratorium on debt repayment was submitted to the regional court. The company, in turn, stated that it is solvent and continues to fulfill its obligations under the moratorium.
LIBERTY Ostrava is an integrated steel plant with an annual production capacity of about 3.6 million tons. The company primarily serves the construction, engineering and oil and gas industries. The company is a leader in the production of road barriers and pipes on the Czech market. In addition to the domestic market, it supplies its products to more than 40 countries around the world.
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