Posted on 15 Oct 2024
ArcelorMittal, the largest steel producer in Europe, has filed a lawsuit in the High Court of England against Liberty Steel East Europe, demanding external administration due to non-payment of €140 million in deferred compensation for assets acquired in 2019. It is reported by ArgusMedia.
ArcelorMittal sold several of its assets to Liberty Steel in 2019, including plants in Ostrava (Czech Republic), Galati (Romania), Skopje (Macedonia), Piombino (Italy) and Dudelange-Liege (Luxembourg and Belgium). This transaction allowed ArcelorMittal to obtain regulatory approval for the acquisition of the Italian steel plant Ilva.
Liberty has committed to pay €140 million of deferred consideration and to provide consolidated financial statements confirming the existence of assets worth at least €150 million until the obligations are fully fulfilled. However, ArcelorMittal claims that the company has not yet received these funds. Last year, a court in Singapore even froze Liberty’s assets, prohibiting their transfer outside the country until the obligations are fulfilled.
In 2023, the High Court of England recognized an arbitration award allowing ArcelorMittal to seize Liberty Steel’s assets in the UK. On October 7, 2024, ArcelorMittal, through its attorneys from King & Spalding International, filed an application for external administration for Liberty Steel East Europe (Holdco).
Liberty Steel is currently in a difficult situation due to the downturn in the steel market. Many of its plants are not operating or operating at minimum capacity, and some assets in Hungary and the UK have been shut down altogether.
As GMK Center reported earlier, Liberty Steel plans to sell the troubled Liberty Ostrava steel plant in the Czech Republic, while initiating bankruptcy proceedings. Since December 21, 2023, the company has been out of operation due to a power outage due to non-payment of bills by Liberty.
Source:GMK Center
