Polish Huta Liberty Częstochowa finally declared bankrupt

Huta Liberty Częstochowa, one of the largest producers of heavy plate in Poland, has been officially declared bankrupt after the district court in Częstochowa rejected the company’s appeal against the decision to liquidate it. The bankruptcy became final on October 24, and now no appeal is possible, Next reports.

This event follows a long period of financial difficulties, which were exacerbated at the end of last year, when production at the plant was halted. In January and February, attempts to resume work were unsuccessful. In April, the company’s CEO Venkatasubramanian Krishnamoorthy set up a “crisis headquarters” to save the company. Nevertheless, mounting debts to ZUS and other creditors forced them to file for bankruptcy.

The court ruled on the plant’s bankruptcy at the end of July, but the decision was withdrawn and returned to the first instance due to the company’s appeal. However, the September repeated decision on liquidation was upheld by the current district court, which consolidated the bankruptcy as final.

The insolvency receiver will now begin his work, and is scheduled to meet with representatives of the Ministry of Industry on November 4. They will consider the possibility of leasing or selling the company. It is also possible to resume negotiations with potential investors to obtain loans to pay off debts. The Ministry of Industry sees this case as part of a broader discussion on the problems in the country’s steel industry.

Huta Liberty Częstochowa used to produce heavy metal for the defense sector, but like many European steelmakers, it faced stiff competition from Eastern producers and rising costs of complying with the CO2 emission quotas set by the ETS. The absence of a level playing field complicated the situation, and even after the production shutdown, the company continued to pay salaries to employees until the end of the summer, and only partial payments in September.

The court’s decision on the final liquidation of the company is the latest step in this long-running crisis for Huta Liberty Częstochowa and is likely to significantly change the situation on the Polish steel market.

As GMK Center reported earlier, Liberty Steel, through its subsidiary Poviglio sp. z.o.o., has recently submitted an offer to lease the Częstochowa steel plant in Poland. The offer includes the provision of immediate financial resources to pay off debts and pay salaries to employees for September.