Liberty Ostrava prepares for the return to work of about 1,500 more employees

27 February 2024

Liberty Ostrava is preparing the return to work of about 1,500 more employees. The smelter wants to install equipment that will allow it to produce without energy from Tameh. For the time being, most of the company’s workers are staying at home and their return has been delayed again by a week, according to the company’s spokeswoman Kateřina Zajíčková. On Wednesday, Liberty will want to assure the court that it is meeting the conditions of the preventive restructuring and remains solvent.

Most of the smelter’s operations are at a standstill because Liberty has still not reached an agreement with its supplier Tameh Czech on energy supplies. Most workers at both companies have been at home since 22 December last year.

“The majority (about 3,000 people) of the employees are continuing on so-called other obstacles on the employer’s side, up to and including March 4, 2024,” Zajickova said.

The figure refers only to employees of Liberty Ostrava, excluding subsidiaries. Even with subsidiaries, Liberty has about 6,000 employees. The union says it currently has about 1,600 employees. This includes people who work all the time on necessary maintenance and workers in departments where operations were later restored thanks to the connection to the heat supply from Veolia Energie. There are also administrative staff, but they work from home. The company produces steel mainly for the construction, engineering and petrochemical industries.

“We are focusing on making maximum use of the production on our rolling mills thanks to the contislits we have purchased, which will improve our financial situation and allow another 1,500 or so employees to return to work in the near future. We are already implementing this important part of the plan,” the spokeswoman said. Contislite is a semi-finished product that is created by continuous casting of metal.

The first shipment of slabs (semi-finished products) has already arrived in the Czech Republic, she said. “Next week we will start producing coils from them, which we will ship to our important customer,” Zajíčková said. She reminded that the company can produce in some parts of the plant thanks to the cooperation with Veolia and its long-term partner ČEZ ESCO, which supplies it with power electricity.

“We continue to do everything we can to break the impasse we reached in negotiations with Tameh Czech,” Zajíčková said. She said Liberty has had numerous negotiations with Tameh over the past five years. “However, our partners have refused to negotiate a contract modification under which they charge us 200 to 300 per cent higher energy prices than normal market prices, even knowing that this makes it difficult for us to do business together and puts thousands of jobs at risk,” Zajíčková said.

She said Liberty is awaiting a response to a proposal it sent Friday on the possibility of modifying the power supply contract, financing options for restarting or taking over the plant. “At the request of the unions of both companies, we will also meet with their boards of directors on March 5,” the spokeswoman said. Tameh still says Liberty’s efforts to address the situation are insufficient.

Zajickova said Liberty is working on an updated restructuring plan based on the assumption that it will operate primary production without energy supplies from Tameh. “This envisages the installation of new equipment that will supply hot air and other inputs needed for the blast furnace. We are working intensively on this solution, negotiating with potential suppliers of the equipment on quotes and installation dates,” Zajíčková said. The result should also be a significant reduction in costs and carbon footprint.

Liberty Ostrava has been struggling to pay its debts for some time. Tameh Czech says that it was the smelter’s failure to pay that caused it to go bankrupt in December. Liberty has been protected from creditors by a court-imposed moratorium since last December, but the restructuring administrator has asked the court to lift the moratorium, according to Seznam Zpravy. The company is insolvent, he said. The court will hear the case on Wednesday, excluding the public.

Zajíčková said Liberty will want to assure the court that it is complying with the conditions of the preventive restructuring and that the company remains solvent. “We will also present the court with our updated restructuring plan, which we believe will lead to the gradual repayment of all creditors’ claims. Even if the court were to lift the general moratorium, this does not mean that the plan itself cannot be used and implemented, albeit in a different legal framework,” Zajíčková said.

Source: Liberty Ostrava and CTK
Photo: Liberty Ostrava

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