Court agrees Liberty Ostrava may sell emission allowances

Ostrava, Sept 30 (CTK) - Liberty Ostrava steelworks' insolvency administrator Simon Petak wants to sell 233,086 emission allowances belonging to the bankrupt steelmaker to CEZ ESCO from semi-state energy group CEZ, a move approved by the Regional Court today.

CEZ ESCO must pay for the allowances at least the amount corresponding to the value at which they are traded on the European Energy Exchange, reduced by a maximum of 5 percentage points. According to available data, the current price of one emission allowance is more than EUR76 (over Kc1,800).

The emission allowances were registered in the inventory of Liberty Ostrava's assets. Their sale has already been approved this week by the creditor committee. "The pre-negotiated offer of CEZ ESCO represents a significant benefit for the insolvency estate. It (CEZ ESCO) is a creditworthy and trustworthy entity with an indirect majority share of the Czech state," Petak said.

He recalled that the state and other public entities such as the Employment Office, the Tax Office, the Czech Social Security Administration, health insurance companies or the Export Guarantee and Insurance Corporation, together with the claims of employees, dominate among the creditors with claims against the insolvency estate and equivalent claims.

Liberty Ostrava produced steel mainly for the construction, engineering and petrochemical industries. Since 2019, it has belonged to Liberty Steel Group from the GFG Alliance group of British businessman Sanjeev Gupta. However, it ran into debt and has ended up in bankruptcy.

Only one bidder has shown interest in the purchase of the company, a consortium of SPV NH Ostrava and SPV NH Koksovna of former minister Martin Pecina. They have offered Kc3.01bn for the entire plant.

The sale of the steelworks to Pecina's companies has been approved by the creditor committee, the insolvency court and the antitrust office UOHS. The new owner is expected to take over the company in the next few days after the deadline for filing an appeal against the UOHS decision expires.

At present, Liberty Ostrava operates three plants whose operations are financed by other companies in the form of tolling. The tolling company purchases the material, provides it to the manufacturer and gives it a remuneration for processing. Liberty Ostrava ceased primary production, that is steel production, when it shut down the blast furnace in 2023.

The company now has around 2,300 employees, down from 6,000 two years ago.

Radek Strouhal, CEO of SPV NH Ostrava and SPV NH Koksovna, said this month that production at the steelworks continue in the form of tolling.

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