Belgian Steel Producer Collapses After FailedRestructuring Efforts
Liberty Liège, the Belgian subsidiary of GFG Alliance'sLiberty Steel, has been declared bankrupt by the Liège Commercial Court. Thecourt's decision marks the end of a prolonged struggle to save the troubledsteelmaker and results in the immediate termination of employment forapproximately 700 workers at the company's Flémalle and Tilleur plants.
The bankruptcy declaration comes after multipleunsuccessful attempts to restructure the business and secure its financialfuture. The facilities have been idle since March 2022, when operations weresuspended due to the dramatic spike in energy costs that followed Russia'sinvasion of Ukraine.
Long-Running Crisis Culminates in Bankruptcy
Liberty Steel acquired the Belgian assets, formerly part ofArcelorMittal, in 2018 as part of Sanjeev Gupta's ambitious expansion of hisglobal steel empire. The operations included galvanizing lines at Flémalle andTilleur that produced steel primarily for the automotive and constructionsectors.
However, the Belgian operations have faced a series ofchallenges in recent years:
- The COVID-19 pandemic disrupted demand and supply chainsbeginning in 2020
- The collapse of Greensill Capital, Liberty's mainfinancial backer, in March 2021 created severe liquidity problems across theGFG Alliance
- Energy costs skyrocketed following Russia's invasion ofUkraine in February 2022, making production economically unviable
- The plants have remained idle for over two years, withworkers receiving unemployment benefits but no clear path to resumingoperations
Despite these challenges, Liberty had been pursuing plansto convert the Belgian operations to green steel production. The company hadproposed a €144 million investment project to transform the facilities, butthese efforts ultimately failed to secure the necessary financial backing andstakeholder support.
Impact on Workers and Local Economy
The bankruptcy has immediate consequences for theworkforce, with approximately 700 employees now facing permanent job losses.This represents a significant blow to the industrial region around Liège, whichhas already experienced substantial deindustrialization in recent decades.
Local unions had been fighting to preserve the operationsand jobs, engaging in negotiations with both Liberty Steel and governmentofficials. However, these efforts were unable to produce a viable solution forcontinuing operations.
The Belgian government, which had been involved indiscussions about potential support measures, now faces the challenge ofaddressing the economic and social impact of this major industrial closure inthe Wallonia region.
Key Takeaways:
• Liberty Liège, the Belgian subsidiary of GFG Alliance'sLiberty Steel, has been declared bankrupt by the Liège Commercial Court.
• The bankruptcy results in the immediate loss ofapproximately 700 jobs at the company's Flémalle and Tilleur plants.
• The facilities have been idle since March 2022, whenoperations were suspended due to the dramatic spike in energy costs followingRussia's invasion of Ukraine.
• Liberty Steel had proposed a €144 million investmentproject to convert the operations to green steel production, but failed tosecure the necessary financial backing.
• The bankruptcy represents another setback for SanjeevGupta's GFG Alliance, which has been struggling since the collapse of its mainfinancial backer, Greensill Capital, in March 2021.
• Liberty Steel acquired the Belgian assets, formerly partof ArcelorMittal, in 2018 as part of Gupta's global expansion strategy.
• The Belgian operations included galvanizing lines atFlémalle and Tilleur that produced steel primarily for the automotive andconstruction sectors.
• The bankruptcy occurs amid broader challenges facing theEuropean steel industry, including high energy costs, competition from imports,weak demand, and the costs of transitioning to lower-carbon production.
• Local unions had been fighting to preserve the operationsand jobs but were unable to secure a viable solution for continuing operations.
• The Belgian government now faces the challenge ofaddressing the economic and social impact of this major industrial closure inthe Wallonia region.
