Liberty Steel Faces Uncertainty as Bidding Deadline Extended Amid Bankruptcy
Liberty Steel's future remains in limbo as the company's bankruptcy trustee, Olivier Wagner, has confirmed that multiple interested buyers have come forward. Despite the extended timeline for takeover bids, crucial decisions about the company’s future remain unresolved. Initially set for the end of January, the deadline for submitting bids has now been extended until 14 February 2025 to allow potential buyers more time to finalize their offers.
Wagner, appointed as the receiver of Liberty Steel's bankruptcy in November 2024, declined to reveal the identities of the potential buyers but did indicate that various groups had shown interest in the company. Some buyers are keen to take over parts of the site, while others are interested in purchasing the site’s assets, such as machinery and installations. A few bidders are focused on continuing the steelmaking business, which would include retaining employees.
Robert Fornieri, deputy general secretary of the LCGB trade union, noted that historically, there have always been three potential buyers for Liberty Steel's assets. However, he emphasized that the final decision on the company’s fate rests solely with the bankruptcy trustee, whose primary responsibility is to resolve the company’s debts and pay its creditors.
A Complex Path to Revival
The road to the possible revival of Liberty Steel is fraught with challenges. Fornieri expressed cautious optimism about the future, emphasizing that even if a takeover occurs, restarting production will not be easy. The company’s operations have been shut down for nearly two years, and many of the facilities will need significant efforts to restart. Moreover, the market requirements for production reliability must be met for the business to succeed again.
The bankruptcy trustee has facilitated site tours for potential buyers in recent weeks. Despite its dormancy, the site in Dudelange, Luxembourg, remains under constant monitoring. According to Wagner, restarting the operations without the current workforce would be a monumental task since the employees hold essential knowledge and experience regarding the production tools and processes.
A Disputed Agreement and Gradual Restart
A key concern for any future business recovery revolves around the supply agreements between Liberty Steel and ArcelorMittal. When ArcelorMittal sold its assets to Liberty Steel, a commercial agreement was struck in which ArcelorMittal would continue supplying materials to the Delange site. However, this relationship has been marred by disputes, with both companies accusing each other of failing to adhere to the terms of the deal.
Fornieri pointed out that the site's production capacity is around 600,000 metric tons per year, but a gradual restart of operations is expected. Initially, production may be capped at about 200,000 metric tons per year, with the hope of increasing volumes once the business becomes profitable again.
Financial Hardships for Employees
For the 147 employees at the Dudelange site, the uncertainty surrounding Liberty Steel's future has created significant financial stress. While some workers received a partial advance on claims following the company’s bankruptcy in December 2024, many employees are still facing hardships. The unions—OGBL and LCGB—have been advocating for the remaining amounts owed to the workers. However, the unions have highlighted that in many cases, the guaranteed claims will not fully cover the total amount employees are owed.
The situation has been further complicated by unequal treatment of cross-border workers, who face additional bureaucratic barriers. Employees who reside in Luxembourg are receiving support and benefits through the national employment agency, Adem. In contrast, cross-border workers from neighboring countries have seen their aid deducted from unemployment benefits in their home countries. This process has led to extended waiting periods and a reduction in the benefits that these workers can claim. Furthermore, many employees have encountered difficulties in securing family allowances, which have been suspended due to the ongoing bankruptcy proceedings.
A Delicate Balance
As Liberty Steel’s future hangs in the balance, the company faces numerous challenges on both the operational and financial fronts. The bankruptcy trustee’s extension of the bidding deadline offers some hope, but there are still significant hurdles to overcome before a buyer can be found, and production can be resumed. In the meantime, the workers, many of whom have dedicated years of service to the company, are left to wait and hope for a resolution to the uncertainty they now face.
