Polish steel producer Celsa has turned down acquisition offers from two Southern European companies producing long steel. The decision was based on the Spanish parent company's valuation of the plant, which was higher than the offers.
Celsa is planning to divest some assets across Europe to ease its financial difficulties. Accordingly, it is targeting the sale of an electric arc furnace (EAF) based plant in Poland. The asking price for this plant, which has a production capacity of around 1 million tons of rebar and commercial bar per year, is estimated at EUR 800 million. However, it is stated that the fact that the incoming bids are below this figure has put Celsa's sales process in a difficult situation.
Poland's construction sector and steel demand
Celsa's Polish operations paint a positive picture for the near future. By 2025, new funding from the European Union is expected to boost construction projects in the country, which in turn will boost steel demand. This increases the strategic importance of Celsa's plant in Poland. However, the fact that the offers made so far have not met the Spanish company's expectations causes Celsa to proceed more cautiously with the sale.
UK plant also on the agenda
Celsa is in talks with potential buyers to divest not only its plant in Poland but also its Cardiff plant in the UK. The sale price for this plant, which has an annual production capacity of 1.2 million tons, is reported to be EUR 200 million. This week, representatives of a European steel producer visited the plant for an on-site inspection. The future of Celsa's Cardiff plant is being followed as closely as the sale process in Poland.
Other developments in the steel industry in Poland...
Celsa's sale attempts in Poland come at a time when other steelmakers in the region are going through similar processes. Liberty-owned Huta Czestochowa is reportedly on the verge of bankruptcy and is looking for a new owner. There are reportedly five different suitors for this plant, indicating that the steel industry in Poland is in the process of restructuring.
These uncertainties in the search for a buyer for Celsa's plants in Poland and the UK point to increased competition and investment opportunities in the steel sector. However, fluctuations in European steel demand and volatility in global markets are among the key factors that will determine how the sale processes will play out.
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