Romanian Liberty Galați to receive state aid for restart

Romanian steelmaker Liberty Galați, which has found itself in a difficult financial situation, will receive government support to resume operations. According to Romanian Minister of Economy Bogdan Ivan, the company will play an important role in providing raw materials to defense industry plants, including those in Brasov, Cuzhir, Sad and Dragomirteş. This was reported by profit.ro.

The financial assistance will allow Liberty Galați to launch blast furnace No. 5 in the coming weeks. On March 5, the court ruled to introduce a preventive process at the company, which provides temporary protection against enforcement of debts. The plant has two months to present a restructuring plan to its creditors.

The plant is in a difficult situation due to rising steel tariffs in the US, the effects of the war in Ukraine and massive imports of cheap steel from outside the EU. The company’s CEO Radu Ionescu said that the new procedure would help channel financial resources to restore production.

It should be noted that the Romanian Ministry of Economy has allocated an additional billion lei (€200 million) in 2025 to support the military industry. The government is also negotiating with the EU to reduce energy costs for strategic producers.

As GMK Center reported earlier, Liberty Galați has been idle for nine months in a row. According to the market, the plant was delaying salary payments, its debts were growing, and commercial disputes were multiplying. In particular, more than 50 companies filed lawsuits against Liberty Galați demanding to recover the money owed. Against the backdrop of these events, there was concern that the company might go bankrupt, similar to the situation with Liberty Ostrava in the Czech Republic.

In early March, Liberty Galați announced the start of a preventive process, a procedure aimed at preventing insolvency by reaching an agreement with creditors. This will help to focus all financial resources on restoring operations and increasing production to a level that will be profitable and sustainable in the future.

Liberty Galați is one of the largest steel producers in Romania, employing 4,500 people and having an annual capacity of 3 million tons of steel. However, financial difficulties led to losses of over 2.2 billion lei in 2023.