The sale of Liberty Galați remains problematic

No bids were submitted at the auction on March 12

The auction for the sale of the Liberty Galați plants, scheduled for March 12, did not take place due to a lack of bids. This was reported by Radio România Actualități.

According to the Euro Insol and CITR consortium, the two administrators of the enterprise, five large companies (one Romanian) obtained the technical terms for the acquisition, but none registered for the auction or submitted bids. Remus Borsa, president of Euro Insol, cited the excessively high starting price (€709.1 million excluding VAT) as the reason for this.

If the government agrees, a second auction could be organized within 30 days, at which the starting price will be reduced, though it will not be lower than €450 million (the liquidation value is approximately €407 million).

The steel plant in Galați, Romania’s only integrated steel producer, was put up for sale as part of the restructuring plans approved by the court for Liberty Galați and Liberty Tubular Products, which are making a joint bid.

Remus Borză previously told DigiEconomic that if the sale does not go through this year, it may not happen at all, as the company is losing market share, customers, and working capital. According to him, when Liberty Galați is idle, costs amount to €14 million per month; when production is underway, they reach €98 million per month. The steel mill is a major consumer of financial resources, raw materials, and other inputs.

As a reminder, according to estimates by one of the administrators (CITR), the cost of fully restarting the plant in Galați will amount to €200 million. This amount will be added to the sum that the future owner pays at the auction for the sale of the steelmaking company. The sale of Liberty Galați to a new investor will help prevent the decline of one of Romania’s largest industrial facilities.