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Judge decides: Liège steel factory Liberty Steel must close

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The Liège company court has ordered the liquidation of the Liège steel factory Liberty Steel, which is in the hands of the faltering Indian magnate Sanjeev Gupta. The Flemish factory in his empire is independent of the statement.

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After three failed reorganisations and the lack of annual accounts, the Public Prosecution Service had asked for the to declare liquidation of the Liège steel factory Liberty Steel† The unions supported the demand. They want a buyer to come to secure the future of the 700 employees in the factories in Flémalle and Tilleur.

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“The reorganisations failed every time,” said Jordan Atanasov, union leader at the CSC. “There was an agreement to lay off 90 employees, but the company was unable to pay the severance payments. So that was never implemented.’

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Looking for candidate buyers

The workers feared the court would grant Liberty Steel even more reprieve. The unions are relieved that that didn’t happen. “Now a buyer can come,” says Atanasov. ‘That is good news. In the meantime, the Walloon government will provide financial support to ensure continuity.’

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The court has appointed three trustees to investigate the possibilities. One potential buyer mentioned is the steel giant ArcelorMittal. The Russian steel producer NLMK would also be a candidate, but this is more difficult due to the geopolitical context. NLMK’s Belgian holding is 49 percent owned by the Walloon Region through its Sogepa fund.

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Wankelend imperium

The liquidation of the steel factory in Liège is part of a complex story surrounding British-Indian businessman Sanjeev Gupta. Last decade he expanded his father’s company into GFG Alliance, a large, acquired player in mainly the steel and aluminum sectors. At its peak, it employed 35,000 employees in 30 countries and generated more than 18 billion euros in turnover.

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The Duffel aluminum rolling mill Alvance is also part of Gupta’s empire. The Duffel factory has long been the subject of a fierce power struggle between Gupta and the American private equity group AIP, but that legal battle is far from over.

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Appeal

Liberty Steel says in a response that it will appeal against the decision of the Liège company court. “We are disappointed that the corporate court decided to ignore our legal arguments and the presentation on the progress of our transformation plan,” said a GFG Alliance spokesperson.

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The company points out that the packaging line in Tilleur was restarted in February, as part of that plan. In the long term, this should attract large customers for specialized packaging. The galvanization line in Flémalle should generate short-term profits. “We continue to believe that our transformation plan would have provided the company with a long-term sustainable future and maintained 650 jobs. We therefore intend to appeal.’

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“Appeal on appeal does not mean that the liquidation will be suspended,” Atanasov says. ‘The trustees continue to work as usual.’

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