An “agreement in principle” has been signed between Liberty Steel and Germany’s Saarstahl for the takeover of Liberty’s France-based Ascoval and Hayange units, the French finance ministry says. ArcelorMittal and Italy’s Beltrame were also among the bidders.

“This agreement in principle has yet to be strengthened, which is why the government will be very careful to ensure that the elements of securing this sale are provided in the next few hours … [This agreement] creates a new European player and it is very good news for the future of the French steel industry and for the employees of the two sites. It affirms our commitment … to ensure the sustainability of their employment and the strategic activity for the French steel industry," finance minister Bruno Le Maire says in a note seen by Kallanish.

Both Ascoval and Hayange have faced a significant reduction in working capital support since the collapse of Greensill, a Liberty spokesperson says. “Although we are keen to keep Liberty Steel France (LSF) within the Group, we have also identified two credible buyers, in ArcelorMittal and Saarstahl, who will be able to build on our ambitions for the business,” he tells Kallanish. “LSF’s main stakeholders will now decide the best way to ensure the plants’ employees, customers and other stakeholders can have confidence in the sustainable future of the businesses.”

Ascoval produces continuous cast rounds and forged products at a production facility in Saint-Saulve, France. It recently started the production of blooms and square billet for a variety of applications, including rail blooms, which are supplied solely to Liberty Rail in Hayange.

Liberty parent company GFG Alliance is restructuring to be able to pay back creditors following the collapse of lender Greensill Capital. Among other things, the group has focused on securing feedstock supply for its European downstream coil plants and is selling non-core UK units.

The company plans to merge its Liège-Dudelange and Magona coil processing plants into the Liberty Galati organisation. The Romanian steelworks will become their primary hot rolled coil provider, to ensure sustainable feedstock supply. The closer link to the downstream plants will allow Galati to offer a wider product range to customers in Central and South Eastern Europe. Piombino-based Magona is expected to resume some activity by the end of July if the steelmaking group’s restructuring plan is successful (see Kallanish passim).