This puts pressure on the process under which Liberty Group and the restructuring manager are seeking a buyer.<\/p>\n
The company is licensed to buy electricity on the day-ahead market (DAM), but this requires financial resources and entails high costs at current spot market prices.<\/p>\n
The company had recently sent most of its 2,200 employees home temporarily and is operating only its welded-pipe unit.<\/p>\n
The electricity supply contract between Liberty Gala\u021bi and Electrica Furnizare has not been extended because of unpaid debts, and a possible disconnection from the grid is \u201ca matter of days\u201d, sources familiar with the situation told News.ro, as reported by Profit.ro<\/a>.<\/p>\n \u201cWe are on the verge of disconnection; it\u2019s a matter of days,\u201d one source said on October 30. \u201cThis time we don\u2019t even have a contract anymore. At least we have access to the DAM, so we can stay connected for a few more days.”<\/p>\n The company needs a constant electricity supply to keep its equipment on standby and avoid the high costs and complex technological processes involved in resuming operations.<\/p>\n \u201cA possible disconnection of the plant from the electricity supply would cause all the plant\u2019s systems to collapse within just a few hours, making it difficult to re-energise the steel unit. This would be an extremely complex process that has never been carried out before and which we believe could take up to 50 days. We also cannot rule out imbalances in the national energy system,\u201d Liberty Gala\u021bi management explained last week, as quoted by Profit.ro.<\/p>\n In addition, the only section currently operating at full capacity would also be affected.<\/p>\n \u201cWe would also have to stop production at the welded-pipe section, although it is fully booked for the next two to three months, and current and future customers would no longer place orders,\u201d the management of the Gala\u021bi plant said.<\/p>\n Finance minister Alexandru Nazare announced that the problems facing Liberty Steel would be on the government\u2019s agenda this week. The state has guaranteed almost EUR 300 million of loans extended by Eximbank in an attempt to prevent the company’s collapse.<\/p>\n The steel mill is of strategic importance to Romania\u2019s industry and could benefit significantly from Ukraine\u2019s reconstruction. However, it is currently seeking an investor as Liberty Steel Group, part of ailing Sanjeev Gupta\u2019s GFG Alliance, failed to fulfill its commitment made when taking it over in 2019. Liberty Steel incurred huge losses, accumulated debts estimated now at EUR 420 million, and reduced operations and employment.<\/p>\n