Liberty Galați: Romanian plant awaiting restart

Against the backdrop of newly proposed EU safeguard measures on steel imports, the rollout of CBAM, and the upcoming Made in Europe plan set to be unveiled in March, European steel assets currently on the market are gaining renewed strategic significance for potential investors. Such assets are often heavily indebted and face operational challenges, frequently relying on government support, yet they retain potential for restructuring and recovery. One of them is the steel plant in Galati, Romania.

Block offer

In February this year, Romania officially launched an auction for the sale of the steel plant in Galați, with public bidding scheduled for March 12.

The assets of Liberty Galați and Liberty Tubular Products Galați are being offered as a block, with a total starting price of €709.1 million, which exceeds the €690 million mentioned in January.

According to Paul Chirlenaru, CEO of Casa de Insolvență Transilvania (CITR), one of two administrators-insolvency managers along with Euro Insol, several potential investors are interested in acquiring the company’s steel plant. These include UMB Grup România, controlled by the family of businessman Dorinel Umbrărescu (which recently acquired ArcelorMittal Hunedoara), India’s JSW Steel,  Jindal Group, Galiawa Group, a steel and building materials manufacturer from Iraq, DeLong Steel China, KMC Steel Turkey, Ukraine’s Metinvest, and a European consortium led by German raw materials trader Steel Mont.

According to Kirlenaru, the administrators intend to speed up the sale process as much as possible.

The opening bid covers the entire industrial platform — Liberty Galați and Liberty Tubular Products Galați. It also guarantees full repayment of all outstanding debts owed to secured creditors and government entities, including state-controlled Exim Banca Românească and ANAF (Romania’s National Agency for Fiscal Administration).

It is worth noting that in September 2025, a consortium led by Steel Mont proposed restarting operations at Liberty Galați. The plan submitted to the court-appointed administrators called for resuming heavy plate rolling. The consortium outlined a comprehensive model that included securing raw material supplies, operating under tolling arrangements, purchasing finished products, and retaining an option for a potential future acquisition of the plant.

In the same month, the Romanian authorities established an interagency committee tasked with safeguarding the state’s interests in Liberty Galați and preventing the company from sliding into bankruptcy.

Later, in October, UMB Steel submitted a proposal to the Romanian government for the urgent purchase of Liberty Galați with the repayment of debts only to state creditors – EximBank România and ANAF. At the same time, more than a thousand others – suppliers, partners, and local businesses – could be left with nothing. In total, the company has 1,197 creditors. UMB Steel justified the expediency of a quick deal by citing the deterioration of equipment and the risk of the plant’s final decline.

As stated in the tender proposal, the Galati steel plant is the only integrated steel producer in Romania with direct access to the port infrastructure of the Danube and the Black Sea. With an annual capacity of up to 3 million tons of steel, the company manufactures products for sectors such as construction, infrastructure, automotive, shipbuilding, energy, and defense.

The main assets offered to potential investors include sintering, blast furnace, steelmaking, and casting facilities, a rolling mill for heavy plate production, hot and cold rolling mills, galvanizing and organic coating lines, a slag dump, land and buildings, and a welded pipe production plant.

Under judicial protection

The Galati plant was acquired by Liberty House Group (GFG Alliance) in 2019. In 2021, the company achieved a record volume of pig iron production at blast furnace No. 5 – 2.1 million tons, with steel production volumes reaching 2.3 million tons and hot-rolled steel production reaching 1.62 million tons.

Beginning in 2022, the company, hit hard by the energy crisis and weakening market demand, started posting substantial losses, with annual steel output estimated at 1.4 to 1.6 million tons.

In 2023 and 2024, the company received two loans to resume operations and cover production costs through Exim Banca Românească (one of which was provided to Liberty Tubular Products Galați, 99.99% of whose shares are controlled by Liberty Galați). They were intended to resume the operation of blast furnace No. 5, the only one in operation.

Since March 2025, Liberty Galați has been in a state of preventive settlement, which precedes bankruptcy. Under Romanian law, this procedure allows a company in financial difficulty to agree a recovery plan with its creditors to avoid insolvency, restructure its debts, continue its activities, and suspend certain enforcement proceedings under the supervision of an administrator.

The plant has been idle since June of last year following another unsuccessful attempt to restart operations.

Liberty Tubular has been under preventive administration since August last year.

According to the Romanian service of Radio Free Europe (Europa Liberă România), the company’s total debt to creditors amounts to €662 million, of which more than €292 million is owed to Exim Banca Românească and €120 million to ANAF.

On January 28, a court in Galați approved an amendment to the restructuring plan for the Liberty Galați steel plant and granted a request to prevent insolvency. This decision created the necessary legal basis for organizing an international auction for the sale of functional assets.

Audits and investigations

It should be noted that the company’s activities in Galați also came under the scrutiny of the country’s regulatory and law enforcement agencies.

In September 2025, it became known that the government regulatory authority was investigating how Liberty Galați had been financed by the state-owned Exim Banca Românească over the past two years (the amount in question is €292 million). The steel company received two loans to restore the operation of blast furnace No. 5.

In November last year, Romanian law enforcement agencies launched an investigation into suspected fraud involving €300 million in CO2 emission allowances. Investigators alleged that members of Liberty Galați’s management had embezzled company funds and created tax evasion schemes.

As reported, an analysis of CO2 allowance transactions between 2019 and 2022 showed that the company did not benefit from these deals and that the Romanian state budget suffered losses.

The Romanian prosecutor’s office claimed that two company officials approved the sale of more than 5 million CO2 allowances worth $137.5 million to two companies, including Russia’s Gazprom. The money was sent to affiliated companies.

Subsequently, in March 2021, the steel producer recorded a deficit of approximately 3 million allowances. Therefore, it had to urgently purchase 1 million allowances from a Czech-based group company for €48 million. The company also purchased 2 million allowances from Gazprom for €107 million, €17 million of which was commission.

Both transactions were carried out at significantly higher prices. As a result, the company’s losses amounted to €154 million.

Investigators also believed that the company’s management transferred more than €137 million to affiliated legal entities in Europe, although there was no operational need to do so. In addition, prosecutors claimed that another €57 million was siphoned off from the company through fictitious consulting and management contracts between 2020 and 2022. For its part, Liberty Steel Group said it was cooperating with the authorities but denied any wrongdoing.

However, no new details have emerged since the case was reported in November last year.

Possibility of restarting

Paul Kirlenaru estimated that a full restart of the Galați plant would require around €200 million. This amount would be in addition to the price the future owner would pay at auction for the steelmaker.

The Romanian publication Viața liberă, with the help of sources in the steel market, calculated that the cheapest option would be to restart the plant’s three rolling mills in Galați, which would cost around €10 million, including energy, gas, and maintenance costs. This is the opinion of the publication’s sources in the steel market. However, the profitability of this scenario is based on Liberty’s ability to produce its own slabs and produce 100,000 tons of steel per month.

The tolling scheme for rolling mills, which was discussed by bankruptcy administrators, is considered a more risky option in the market, and it will not ensure the operation of the entire plant.

Industry experts consider the most viable economic solution to be a complete restart of the company’s own iron and steel smelting, which will allow the plant to operate at full capacity. This will require the restoration of the entire technological chain. The estimated costs are estimated at €200 million, including raw material stocks and maintenance. The period required to implement the scenario will be three months, with the rolling mills able to be put into operation in four to six weeks.

The sale of Liberty Galați to a new investor will help prevent the decline of one of Romania’s largest industrial facilities. The choice of strategy and direction of investment will depend on the future owner. However, according to Romanian media, the problems that remain are securing carbon allowances for future production and restoring the workforce.

«Currently, any asset that has the capacity to produce steel products in the EU is attracting the attention of investors,» notes Andriy Tarasenko, chief analyst at GMK Center.

He added that the reduction in import quotas will create a different price reality in the EU market. According to GMK Center’s expectations, the price of hot-rolled coil in the EU will reach €760-780/t in North-Western Europe in the third quarter of this year.