Liberty Galați: Romania's only integrated steelworks goes quiet as a €182m asset sale stalls

Liberty Galați, Romania's only remaining integrated blast-furnace steelmaker, entered November 2026 with most of its roughly 2,200 employees on technical unemployment and activity suspended for the month, keeping only maintenance, security and equipment-preservation crews on site. Coming after months of unpaid wages and a court process that keeps slipping, the move marks the point at which the plant stopped behaving like a steelworks and started behaving like an asset awaiting disposal.

That distinction matters for anyone reading this as a distressed-M&A story. It is also a supply-chain story: Galați is the sole Romanian source of domestically made slab, plate and coated flat products, and its absence is already being absorbed by imports and by competitors in the Black Sea basin.

From Mittal to Gupta to the courts

The works at Calea Smârdan on the Danube has been through several owners in two decades. Privatised to Mittal Steel in 2001 and renamed ArcelorMittal Galați after the 2006 merger, it was sold in 2019 to Sanjeev Gupta's Liberty House as part of a six-asset European package cleared by the European Commission (Case M.9172) for a reported net consideration of €740 million across the whole bundle — a figure that should not be attributed to Galați alone.

What Liberty acquired was an ageing but complete integrated route: coke ovens, sintering, several blast furnaces (one in regular operation), basic-oxygen converters, continuous casting and downstream hot-rolling, plate, cold-rolling, galvanising and colour-coating lines. Nominal crude-steel capacity marketed at the time was about 3 Mt/y, with structural capacity closer to 4 Mt/y.

Output then collapsed. Global Energy Monitor's worldsteel-derived series shows crude steel falling from about 2.35 Mt in 2021 to 1.63 Mt in 2022 and effectively to residual levels in 2023–24. The decline tracks a familiar pattern across the GFG Alliance portfolio: working-capital constraints, strained raw-material and energy supply, and a decarbonisation plan that never secured financing.

Where the restructuring stands

Galați entered a preventive concordat — a Romanian pre-insolvency procedure, not formal bankruptcy — in March 2025, with total debts reported at roughly €662 million at that stage. Creditors have since sought amendments, two international auction attempts failed, and by late 2026 the process had shifted to a court-supervised direct negotiation with strategic investors.

The ~70% write-down in 18 months reflects sold inventory, equipment deterioration during idling, and — crucially — the restart and modernisation capex any buyer must fund on top of the purchase price. That restart burden is the real reason bidders have been thin, and it is why any transaction at €200m should be read as a starting point rather than a valuation.

A furlough, not a closure

The October–November sequence is worth reading carefully: about 300 workers protested outside the Galați Prefecture over wages reportedly unpaid since May; the interministerial committee meeting that was to vote on the plan was pulled from the agenda; plant directors resigned; and from 1 November the workforce went onto technical unemployment. None of that is a formal insolvency filing, and the equipment-preservation staffing implies an owner — or creditor group — still intent on keeping the furnaces and mills recoverable.

A €182 million liquidation value for an integrated site with a working hot strip mill and coating lines is, on any reading, a distressed number. It also prices in the possibility that the blast furnace never relights.

The blast furnace is the hard part

A detail that tends to be lost in the financial coverage: Galați's primary route was already fragile before the 2026 stoppage. The principal iron unit, Blast Furnace No. 5, was relined as recently as March 2023 — meaning a buyer inheriting the asset would take on a furnace with a relatively fresh lining but a restart that has never been executed at scale from a cold, prolonged idle. Refractory and casthouse condition after months without hot metal, plus the state of coke ovens and the sinter plant, are the technical questions that will dominate any buyer's due diligence.

Galați is also an energy-intensive site dependent on competitive power and gas. Romanian press reporting through 2026 repeatedly flagged the prospect of electricity disconnection, and securing a supply contract is listed among the conditions for any restart. For a prospective investor, power procurement is as material as the purchase price.

What happened to GREENSTEEL

Liberty's own decarbonisation plan for Galați, launched in October 2020 with Romgaz and EximBank as partners, envisaged replacing the blast-furnace route with a 2.5 Mt/y gas-based DRI plant migrating to hydrogen by 2030, two hybrid electric arc furnaces, a ~1.1 Mt/y Danieli minimill and up to 250 MW of on-site solar. Capex was cited at up to US$1 billion.

None of it was built. There was no final investment decision, no EPC award and no disclosed financing package. In the current restructuring, GREENSTEEL should be treated as a dormant concept rather than a live pipeline: any future DRI-EAF project at Galați would almost certainly be re-tendered from scratch by whoever buys the asset, and would depend on Romanian and EU state-aid support under frameworks such as the Clean Industrial Deal State Aid Framework that runs to 2030.

What this means commercially

For suppliers and contractors, the honest answer is that there is no construction procurement to chase here. No EPC contract is live, no equipment package is out for tender, and the restructuring itself is being run by insolvency practitioners rather than a project team. The relevant commercial categories are different ones: rolling and pickling tolling (the plant partially restarted rolling under tolling arrangements in mid-2026, though the primary route stayed cold), raw-material supply, electricity supply, and the advisory and valuation work around the sale.

For steel buyers, the implications are more immediate. Losing Romania's only integrated producer removes domestic supply of heavy plate and coated flat products used in construction, shipbuilding, energy and defence — sectors where qualification cycles are long and import logistics through Black Sea and Danube ports add cost and lead time. Turkish, Italian and Asian mills have scope to fill the gap, but at the cost of the security-of-supply and lead-time profile that domestic production provided.

For the wider Romanian industrial base, the strategic question is whether a buyer can be found who will relight the furnace rather than run the rolling and coating lines on imported slab. The latter is cheaper, faster and far more likely; it would preserve employment at a fraction of current levels and would permanently end primary steelmaking at Galați. That is the fork the November furlough has made explicit.

What to watch

• Committee and court approval of the revised plan, including the ~€200m floor and restart obligations — repeatedly delayed and still the gate to any sale.
• Creditor alignment. ANAF and Exim Banca Românească hold the bulk of the claims and have previously withheld support; their votes determine the price and the terms.
• Identity of the buyer. Press reporting has linked various strategic names to the process, but no bidder has been confirmed and none should be treated as likely.
• Power supply. A restart without a secured electricity contract is not possible, and the clock on disconnection risk has not stopped.
• Primary vs finishing route. Whether an eventual owner commits to relighting the blast furnace or converts Galați into a rolling-and-coating operation on purchased slab will determine the plant's steelmaking future — and the scale of any future equipment procurement.