The magistrates of the Galaţi Court decided on September 23 to postpone a decision on the new plan for the direct sale of ailing Liberty Galaţi steel mill, including its subsidiary Liberty Tubular Products Galaţi.
The decision was made at the request of the pre-insolvency administrators after the main creditors, ANAF and Exim Banca Românească, did not vote on the proposed plan and submitted several amendments, according to News.ro.
CITR and Euro Insol are managing the financial restructuring procedure of Liberty Galați, after over 100 creditors filed for bankruptcy of the plant at the beginning of last year. At this moment, the company is in the pre-insolvency stage (preventive composition proceedings).
The magistrates of the Galați Court were scheduled to rule on Wednesday, September 23, on the new plan for the sale of Liberty Galati’s assets by direct negotiation, following repeated failed auctions at declining prices.
“The plan has been communicated to the creditors, and we are currently in the legal negotiation period with them,” reads the joint message of the two pre-insolvency administrators, CITR and Euro Insol.
The main creditors, the tax collection agency ANAF and the state bank Exim Banca Românească, with total claims of over EUR 450 million, which give them total control over creditors’ decisions, did not vote either for or against the new sale plan through direct negotiation. The pre-insolvency administrators requested an extension of the trial period, within the margin of the 60 days allowed by law.
“We are waiting for the court to grant us a new deadline, which will allow us to complete the negotiations, obtain the approval of the creditors and – subsequently – approve the plan. We are confident that the dialogue with the creditors will allow us to agree, in a short time, a form of the plan that will gather the necessary support for continuing the recovery procedure,” added the representatives of CITR and Euro Insol.
The request for an extension of the deadline comes after, at the beginning of the week, a meeting of the Interministerial Committee for Protecting State Interests was held at Liberty Galați.
Government representatives stated that the role of the Committee is to monitor and take note of the evolution of this procedure, given the strategic importance of the plant for the city of Galati and for the regional economy.
“The committee is not a party to the composition / pre-insolvency procedure and does not intervene in the relations between the pre-insolvency administrator and the creditors, respectively in the expression of their vote, which remains autonomous, according to the insolvency law,” the government also announced.
So far, two unsuccessful auctions have been organised for the sale of the plant, with a starting price of EUR 709 million and EUR 463 million, respectively. The first step for the sale through direct negotiation – the regulation – has already been finalised, as CITR representatives told News.ro at the end of August.
“Yes, there is a sales regulation that was designed and submitted in draft, as a presentation element, to establish the general strategy,” Paul Dieter Cîrlănaru, the general director of CITR, told News.ro.
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