Liberty Steel European sites face questions

Liberty Steel, part of the United Kingdom-based GFG Alliance, reportedly is having trouble sustaining productions at its mill sites in Europe.

Argus Media reported in mid-June that Liberty Steel Ostrava, a blast furnace/basic oxygen furnace plant in the Czech Republic, had entered into an insolvency process. Liberty earlier had tried to sell the mill complex, according to the news service.

The Czech mill was acquired by GFG and Liberty from Luxembourg-based ArcelorMittal in 2019. As of late last year, seller ArcelorMittal was taking legal action to finish collecting on funds related to that transaction it said Liberty still owed.

Another mill acquired in that transaction, located in Romania, idled its blast furnace in May. At that time, Argus referred to the plant as Liberty’s “only operational blast furnace in Europe.”

GFG and Liberty have been engaged in debt and corporate restructuring operations since 2021, when a banking and finance company with which it had been collaborating, Greensill Capital, collapsed suddenly.

Later that year, Liberty formed a Restructuring & Transformation Committee (RTC) that included the appointment of a Chief Restructuring Officer Jeffrey S. Stein, who previously served as chief restructuring officer of Liberty Steel Group Holdings.

Reports indicate Liberty has been unable to operate the massive Ostrave complex—which has four blast furnaces and can produce more than 3 million tons per year of steel—profitably. A report from MetalMining.com indicates Liberty had been experiencing losses of some $1 million per day.

Other reports indicate cash flow problems have resulted in Liberty Steel having difficulty making timely payments to scrap providers and other suppliers to its mills. Earlier this year, Liberty’s financial footing was pointed out as a concern by steel mill unions in Europe.

Also complicating its European landscape is the high carbon footprint of its blast furnace operations in the Czech Republic, Hungary and Romania. The company will convert capacity in Hungary to electric arc furnace (EAF) technology in an attempt to offer lower-carbon steel to the European market.

Although its mill in Rotherham, England, is a scrap-fed EAF facility, Argus says it has produced only about 10,000 tons of steel so far this year. Shortly after the Greensill collapse, reports indicated scrap processors began withholding shipments to that mill. In early 2023, Liberty indicated it would import steel billets from outside the U.K. to supply the Rotherham plant.

Earlier this month, Liberty hired Andreas Böcskör as new chief financial officer of its European business, to be based in Vienna. About three months earlier, GFG announced Thomas Gangl, another Austrian, as the new CEO of its European business.

“Andreas will oversee all financial aspects of Liberty’s European operations, including strategic financial planning and reporting, risk management and ensuring compliance with regulatory requirements,” Liberty says.