Romanian businessman Dorinel Umbrărescu, with his core business in road construction, and the richest Ukrainian Rinat Ahmetov, owner of the Metinvest group, among others, have reportedly submitted offers to take over the ailing integrated steel mill Liberty Galati, currently part of Sanjeev Gupta’s Liberty Steel Group, according to Economedia.ro.
“[Dorinel Umbrărescu] is one of the potential buyers. We had discussions,” Remus Borza, president of Euro Insol and the one who manages the financial restructuring plan for Liberty Galaţi, told Economedia.ro.
However, Umbrărescu reportedly conditions the takeover on including in the deal the EUR 500 million debt owed by Liberty Galati to the state’s budget.
“If the state agrees to cede its debt [to the buyer], it would make possible the takeover. If not, the plant [to sell Liberty Galati to Umbrărescu] will never work,” the sources contacted by Economedia.ro claimed.
The same sources explained that the Romanian businessman believes that no one is currently willing to invest in such a plant, in the absence of clear guarantees regarding the transfer of control.
However, sources familiar with the deal contacted by Economedia.ro said that an international auction will be organised, to which other investors may also come. The price envisaged for the steel plant is estimated between EUR 420 million and EUR 700 million, according to the same publication.
“The government is expected to receive an amendment to the restructuring plan on October 24 that will allow the sale of the core business in an auction, starting in a first stage from the market value and, if it is not sold, the second auction will be at a price equal to the liquidation value of the assets (the price that would be collected in bankruptcy),” according to the sources cited by Economedia.ro.
Umbrărescu and Ahmetov are the only ones who want the full takeover of the steel plant, according to prior information. Both investors had reportedly sent teams of experts to the steel plant during the due diligence period.
Two other bidders are reportedly interested in only part of the assets of Liberty Galati. They are a European consortium led by Steel Mont and a Turkish company.
However, the Romanian state would prefer a full takeover solution, which would also solve the problem of the amounts that the tax collection agency ANAF and state bank EximBank have to recover from Liberty Galați, according to Economedia information.
iulian@romania-insider.com
(Photo source: the company)
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