Integrated steel mill Liberty Galati in Romania (formerly Sidex), with a liquid steel capacity of 3 million tonnes, part of steel group Liberty, announced on March 4 that it entered the pre-insolvency procedure "to stabilise the business, optimizing the allocation of resources and opening up new investment opportunities."

The measure is taken in the context of geopolitical changes, new tariffs imposed by the US on steel imports (25% as of March 12), and the lack of real measures to protect the steel industry at the European Union level, the company said.

"In the current market conditions, impacted by the prolonged war in Ukraine, high energy prices and huge imports from outside the EU that have flooded Europe, as well as in the context of the new tariffs imposed by the US on steel imports and the lack of real measures to protect the steel industry at the European Union level, the new procedure will allow Liberty Galați to allocate all available financial resources to restart operations and increase production to a sustainable level," said Liberty Galati general manager Radu Ionescu, according to Economedia.ro.

The steel plant is facing insolvency requests from dozens of unpaid suppliers, salaries are delayed, and its only blast furnace has been shut down for nine months.

The Liberty Galati management reportedly expects rescue from a bank loan under discussion with state-owned Exim - Banca Romaneasca. 

"We are dependent on the Exim loan. With the first tranche of the loan, we settled the contractors and the energy bills. The second tranche of the loan was delayed, but we expect that the funds will be available very soon to restart [operations]," the company management said, quoted by Economedia.ro.

Last week, Europa Libera Romania announced that the Romanian state appointed Dan Sandu, the general director of the Investment and Development Bank, as a member of the Board of Directors of the Liberty Galati, but it remains unclear whether the state bank will finance the company or not.

The European Commission promised a plan to protect the local steel industry.

On the same day Liberty Galati was announcing its pre-insolvency procedure, European Commission president Ursula von der Leyen announced a plan to help the sector "thrive globally" would be unveiled on March 19 by Commission vice-president Stéphane Séjourné.

The European sector is now not only concerned about "the almost four million tons of EU steel exports every year to the US," which will be hit by US tariffs, but also about the 27 million tons of global steel imports currently arriving in the US from elsewhere, which will now be deviated to open markets, Axel Eggert, the director general of steel trade group  EUROFER told Euronews.

iulian@romania-insider.com

(Photo source: the company)