Romania’s steelmaker Liberty Galati set to avoid insolvency, helped by EU’s revised policies
<p>Liberty Galati, the sole integrated steel producer in the region, hopes to resume full operations at a capacity of 2 million tonnes per year, about two-thirds of its nameplate capacity according to the pre-insolvency request approved by the court this month – and the revised European Union’s strategies in the sectors of defense and energy may help it survive.</p>

<p>Liberty Galati has two months to come up with a recovery plan, which must necessarily envisage an output of over 172,000 tonnes per month, according to the pre-insolvency request consulted by Profit.ro. The European Union’s plan to boost defense manufacturing, address the imports of cheap steel, and set more realistic decarbonization targets may come just in time to help the company recover when its survival seems at stake.</p>

<p>The pre-insolvency procedure also allows the company to use the RON 750 million loan extended by Exim Banca Romaneasca solely for working capital.</p>

<p>Additionally, Liberty Steel was promised RON 350 million in orders from companies in the defense industry – but this depends on how quickly the companies are developing production strategies.</p>

<p>The Romanian steelmaker will also benefit from the renewal of the preferential regime extended to energy-intensive companies for the payment of “green certificates.” &nbsp;Energy-intensive companies have been allowed to purchase fewer green certificates (a way of subsidizing wind and solar projects) for the past ten years, with the scheme set to expire in December of this year.&nbsp;</p>

<p>However, the high energy prices in Romania compared to even other countries in Europe is a major obstacle for Romanian companies, including Liberty Steel.&nbsp;</p>

<p>Finally, the European Union’s move to prevent the import of chap steel may help Liberty Steel reach breakeven.&nbsp;</p>

<p>The European Union will tighten steel import quotas to reduce imports by another 15% from April, the Executive Vice President of the European Commission Stefan Sejourne announced last week, as reported by <a href="https://www.g4media.ro/uniunea-europeana-ar-putea-reduce-importurile-de-otel-cu-15-pe-fondul-efectelor-taxelor-vamale-americane.html?mc_cid=d1a4e05122&amp;mc_eid=cd1f92f96c" rel="noopener" target="_blank">G4media.ro</a>. The decision is aimed at preventing the European market from being flooded with cheap steel, following the 25% tariffs announced by President Donald Trump on steel and aluminum imports.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Liberty Galati)</em></p>