Troubled Polish steelmaker Liberty Czestochowa has been declared insolvent by the Czestochowa regional court and been appointed an administrator, a court spokesperson confirms. The decision is not legally binding and the steelmaker’s owners can appeal to the Czestochowa district court.

The company went into receivership last month (see Kallanish passim). Adrian Dzwonek, who was then appointed the receiver, will now fulfil the role of administrator.

“Like all Europe’s steel producers, Liberty is being severely affected by highly challenging market conditions, including record import levels,” a Liberty spokesperson tells Kallanish. “We will be appealing the Czestochowa Court’s decision, but in any event this does not stop the plant’s current restructuring and restart plan to continue. We remain fully committed to the restructuring and restart of the facility.”

Liberty has also encountered financial difficulties at its other plants in Central and Eastern Europe. Last month, the group put up for sale its Ostrava steelworks in neighbouring Czech Republic and filed for a judicial reorganisation of the plant after the Ostrava regional court commenced insolvency proceedings against it.

“Despite very tough market conditions, we are managing our other businesses and believe they will weather the current downturn,” the spokesperson continues, pointing to the fact Romania-based Liberty Galati plans to restart its blast furnace No.5 in the coming days.

Last month, the IndustriALL union federation called for “emergency action” at national and EU level to stop “the crisis” at Liberty Steel’s European plants, what it called an “industrial catastrophe”.  It added: “While industriAll Europe had reported grave concerns about the viability of GFG Alliance’s continental European businesses earlier this year, the combination of adverse market conditions and lack of liquid capital has led to the extreme deterioration of the situation.”

Among unions’ demands is “emergency public support and coordinated actions” to save Czestochowa and Ostrava from bankruptcy, it continued.

The All-Poland Alliance of Trade Unions meanwhile warned earlier this month that around 1,000 people risk losing their jobs at Czestochowa, which has remained idle since last year.

Talk has been circulating for months of the plate maker entering insolvency proceedings, with its difficult financial situation and lack of production being discussed at a recent industry event. In May, Tomasz Slezak, chief executive of Poland’s state-owned Weglokoks, said his firm would consider acquiring Czestochowa if the opportunity arose (see Kallanish passim).

The Polish plant said in March it was gearing up for resuming production following a long period of stoppage. Former Sanjeev Gupta advisor Raghav Aggarwal was brought in to lead the firm’s “war cabinet”, supporting the management and Liberty European upstream businesses chief executive Theuns Victor in implementing a turnaround plan.

Liberty Czestochowa has a 700,000 tonnes/year EAF and 1.2 million t/y heavy plate capacity.