Celsa, evaluation struggle to decide the steel giant’s future
How much is Celsa worth? It is not an easy question, especially when the ownership and future of one of the great Spanish industrial companies depends on its answer, a solid giant considered strategic for the Spanish economy as a whole, and in a few days will see how the judge decides whether the company is still in the hands of its current owners, the Rubiralta family, or passed into hands creditor funds conglomerateHolders of the bulk of the debt accumulated by the group. With presence in Spain (in about fifteen provinces), France, the United Kingdom, Denmark, Finland, Norway, Poland, Sweden and Ireland, Celsa is primarily dedicated to the production of steel from Iron scrap recycling, being the first European producer of low-emission “round steel”. Twenty job centres, seven steel mills, twelve rolling mills and 45 recycling plants are at stake: ten thousand direct jobs and another 20 thousand indirect jobs, up in the air.
Hence, the question about Celsa’s current worth is not a fickle one. Generally, if a company is valued at more than its debt, it is considered current contributorsThey will have options to stay ahead. On the other hand, if Celsa’s valuation is lower than the debt in the hands of the funds, they will be able to seize the property. They are not in small numbers. According to reports provided by its current ownership, Celsa is worth around €6,000m, while expert opinions provided by funds point to a range of between 2400 and 2700 million, That is, far less than the company’s debt, at about 3,500 million, 2,200 of which are in the hands of creditors: Deutsche Bank, Goldman Sachs, Senior Vice President… Request that debt be converted into corporate equity and demand approval of the matching plan presented.
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Founded in 1967 by the Ruberalta brothers, the Celsa Group is mainly dedicated to the recycling of ferrous scrap to produce steel, being the first European producer of low-emission “round steel”. They employ about 10,000 people, as well as another 20,000 indirectly. They have a presence in half a dozen European countries, in addition to Spain.
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– Creditors – Deutsche Bank, Goldman Sachs, among others … – own a large part of the group’s debt (about 3,500 million together) and are now demanding capitalization to take control of the company. The current ownership is backed by management, employers and unions, who fear the money could break up the company for resale.
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– The key to the dispute, which is being discussed these days in a Barcelona court, is in the company’s valuation. An auditor who rejects the property values Celsa at 2,400-2,700 million, with which the debt would exceed that amount, putting the company in the hands of the funds. On the other hand, the assessment of the experts contributed by Celsa raises it to 6000 million.
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– After 2022 with record sales of 6,084 million and overall results in excess of 850, Celsa’s current ownership confirms that the company is quite viable, especially if the 550 million government-granted SEPI is now blocked due to lack of agreement.
Determining who is right, or who is closest to the truth, is what the President of Commercial Court No. 2 in Barcelona will decide in the coming days, since from last Monday until tomorrow there is a great many. Concert Marathon Encorewitnesses from both sides – shareholders and funds – to try to convince the judge that Celsa’s value is one or the other.
The debate is not only technical, but also focused on proving that the company’s industrial future is somehow secured. the The Roberta family In this sense, he has the decided support of Catalan, Basque and Cantabrian executives – in whose territory the main factories are located – as well as unions and Fomento employers, who fear that Celsa in the hands of funds will end up chipping away so they can recoup their investment.
On the other hand, testimonies presented this week by the creditors themselves made it clear that they had no plans to influence Celsa’s employment or to close factories, and that all they wanted was to name Independent board of directors, “consists of the best possible profile in the industrial sector, who will be responsible for the professionalization and improvement of the management of the group”. They noted this week: “We care about Celsa, not its shareholders.” “The restructuring plan does not include measures that have an impact on employment in the group,” added the funds.
In the face of this consideration, with the present contribution, it is a matter of presenting the funds as arising without knowledge of the sector or any claim or suspicion other than investment recovery. Celsa’s lawyer asked the lawyers several times, “Do you know what the group’s annual output is?” Fund representatives They try to sow doubts about their knowledge and the future of the company if it falls into their hands. In the same vein, the witness put forward by Kutxabank – the only one of the creditors to reject the remainder plan – confirmed that if the creditors’ restructuring plan is followed, Celsa will be insolvent within five years. After a 2022 fiscal year with record sales of 6,084 million and a total score of over 850, Celsa’s current ownership confirms that the company is entirely viable, especially if the 550 million SEPI award is now blocked due to a lack of agreement.
The main discrepancy remains in Celsa’s assessment, particularly with regard to the “downward” report by Lexaudit, which in turn is offset by the “upward” assessment of Lazard and by subsequent expert opinion provided by Rubiraltas. , which is considered correct Forecasts provided by the company. Another expert opinion, in this case from a DBO, excludes the Lexaudit report and points out that in addition to being made without direct information from Celsa, it has a negative skew of 2000 million.
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