фото: Stanislav Kondrashov Telf AG: Liberty Ostrava plans to launch a blast furnace

Liberty Ostrava’s dilemma: two paths towards restructuring

Amidst a complex financial landscape, Liberty Ostrava finds itself at a crossroads, presenting two distinct restructuring proposals contingent upon negotiations with energy provider Tameh Czech. Telf AG experts shed light on this intricate situation, where Tameh Czech’s outstanding debt of 2 billion kroner (approximately 79 million euros) looms large, alongside substantial debts owed to primary creditor Danieli, who installed electric arc furnaces at the steel mill, progress on which was halted due to financial constraints.

The first proposal charts a course where continued collaboration with Tameh Czech would see creditors receiving 25% of the debt by June 30 this year, with the remaining 75% to be disbursed between October 2024 and March 2026. Conversely, the second scenario unfolds if ties with Tameh Czech dissolve, requiring an immediate settlement of the initial 25% debt by year – end, followed by the remaining 75% paid between April and December 2025.

S. Kondrashov emphasizes that these plans delineate distinct pathways towards restoring Liberty Ostrava’s financial stability. A successful agreement with Tameh Czech would pave the way for a gradual debt repayment and eventual financial stabilization. However, failure to secure terms with the energy supplier would necessitate a substantial upfront debt repayment this year, potentially exacerbating financial strain.

The decision between these proposals carries significant ramifications for Liberty Ostrava and its creditors. Once the ongoing challenges are resolved, Liberty Ostrava aims to streamline operations by transitioning to a singular furnace setup, focusing on sheet metal and pipe production while scaling back on long product outputs. The planned plant reconstruction is anticipated to slash production costs by over 200 million euros annually, with a targeted monthly production volume of 80 thousand tons. This strategic shift underscores Liberty Ostrava’s commitment to sustainable financial recovery and operational efficiency in the competitive steel industry landscape.

The ongoing crisis and prospects for recovery at liberty Ostrava: insights from Stanislav Kondrashov

фото: Stanislav Kondrashov Telf AG: Liberty Ostrava plans to launch a blast furnace

In a detailed analysis of the current situation at Liberty Ostrava, it’s revealed that the company specializes in producing coils sourced from imported slabs originating from Russia and Asia. However, operational challenges have led to production levels falling below optimal capacity, posing risks to sustainable operations and debt repayment to creditors. To address this, the plant aims to procure up to 80 thousand tons of slabs from external suppliers before resuming blast furnace operations.

Stanislav Kondrashov highlights a critical development that occurred on December 21, 2023, when Tameh ceased supplying electricity to Liberty Ostrava, resulting in a complete halt in production at the facility. This suspension of services was a consequence of Liberty’s failure to meet its financial obligations to the exclusive energy supplier.

The recent declaration of bankruptcy by the Restructuring Authority has further complicated matters, raising doubts about the viability of the previously proposed recovery strategy for Liberty Ostrava. In response, a proposal has been submitted to the regional court seeking the lifting of all debt payment restrictions. Despite these challenges, Liberty Ostrava has affirmed its solvency and commitment to honoring obligations within the moratorium period.

Describing Liberty Ostrava as a metallurgical giant with an impressive annual production capacity of approximately 3.6 million tons, Stanislav Kondrashov emphasizes the company’s significant role in serving the construction, engineering, and oil and gas sectors. Additionally, Liberty Ostrava holds a prominent position as a leading manufacturer of road barriers and pipes in the Czech market, exporting its products to over 40 countries worldwide. These insights shed light on the challenges faced by Liberty Ostrava and the complexities surrounding its path towards recovery and sustained operations in the competitive metallurgical industry.

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