UMB Steel submits an urgent buyout offer to the Romanian government for Liberty Galați

Romanian steelmaker Liberty Galați is at the center of a heated debate over its possible rescue. UMB Steel SRL, owned by businessman Dorinel Umbrăescu, has sent a letter of intent to the Romanian government, declaring its readiness to urgently acquire the plant and resume steel production. This is reported by MonitorulDeGalati.

According to the document, UMB Steel’s offer provides for full payment of debts to state creditors EximBank România and ANAF, while more than a thousand other creditors – suppliers, partners and local businesses – may be left with nothing. Thus, the company plans to gain control over the plant’s assets – land, equipment and buildings – in exchange for repayment of only part of its liabilities.

Experts warn that such a deal could become a liquidation under the guise of a rescue, as the remaining creditors will lose their chance for compensation, and the company, stripped of its assets, could be officially declared bankrupt. At the same time, government agencies with the largest secured claims will get out without losses.

In its letter, UMB Steel emphasizes the need for a quick deal, citing the degradation of equipment and the risk of the plant’s ultimate demise. However, for the local economy, this could mean the collapse of entire production chains – Liberty Galați employs more than 2,000 people and cooperates with more than 1,000 companies providing about 5,000 jobs in the region.

The state’s claims to the plant exceed €430 million, while in 2019 Liberty Group acquired the company for €740 million. The promised investment by British owner Sanjeev Gupta was never realized.

According to Remus Borza, interim manager of Liberty Galati, a total of four offers have been received: two for a full acquisition and two for temporary agreements.

Earlier, a European consortium led by Steel Mont, a trading company, announced its intention to resume operations with a potential acquisition of Liberty Galati. The documents were handed over to the company’s administrators on September 23.