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Liberty Czestochowa in danger of bankruptcy

Polish steel producer Liberty Czestochowa, a subsidiary of global steel giant Liberty Steel, may enter bankruptcy proceedings due to financial problems.

Liberty Czestochowa in danger of bankruptcy

Liberty Group said it remains committed to continuing production while it assesses the current legal situation. A Liberty spokesperson said: "We are disappointed with the court's decision, which was based solely on the claim of a small supplier. We are currently evaluating our legal options but remain committed to getting Liberty Czestochowa back into operation."

In April, one of Liberty Czestochowa's creditors applied to the Czestochowa court, requesting the steelmaker's bankruptcy. In May, the court appointed a temporary judicial administrator for the company. This administrator authorised the day-to-day operations of the plant, while requiring court approval for some decisions. This step was taken in order to meet the demands of creditors and protect the plant's assets.

The court administrator determined that Liberty Czestochowa's board of directors had failed to submit the required financial reports to the court. These reports will play an important role in the court's bankruptcy judgement. The interim administrator has 30 days to prepare this report.

Liberty Czestochowa's representatives said that they had not yet received a request from the court to submit documents and that no hearing date had been set. The plant, which has been idle for a long time, announced plans to restart production in March. Preparations have begun, including testing of equipment and facilities and discussions with utilities and material suppliers, but production has not yet started.

Last month, Tomasz Slezak, managing director of Poland's state-controlled Weglokoks, said that the company might consider acquiring Liberty Czestochowa if favourable conditions arise. Slezak stated that the plant's heavy plate production is critical for Poland's offshore wind energy projects and defence industry, making it strategic for Poland's national security.

Unions at Liberty Czestochowa met with the Czestochowa City Council to emphasise the plant's need for working capital. As a result of the meeting, the City Council appealed to the Polish government for help. The unions are demanding the necessary financial support to get the factory back into operation and provide job security.

Liberty Czestochowa is facing serious financial problems and its future is uncertain. Although the company remains committed to restarting production, the bankruptcy process and legal uncertainties will determine the future course of action. Interventions by the Polish government and local authorities will have an impact on the company's future operations.

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