The Spanish state holding company Sociedad Estatal de Participaciones Industriales (SEPI) has allocated funds worth €550 million for the rescue of the distressed steel company CELSA, which is the largest allocation made to a Spanish company to date. However, the steelmaker is facing obstruction by its creditors led by Goldman Sachs and Deutsche Bank regarding the use of the funds in question. The funds are also subject to approval from the European Commission.
The banks in question, which bought CELSA’s debts from other banks in 2018 at enormous discounts of up to 90 percent, now intend to obtain average annual returns of close to 80 percent. In particular, the banks demand the first €550 million in operating revenues that the group achieves after its debt restructuring, plus 49 percent of the value generated until 2029. CELSA’s unwillingness to accept these conditions is putting its own rescue at risk, SteelOrbis understands.
Even Spanish Prime Minister Pedro Sanchez has intervened and talked to the Deutsche Bank president himself to help rescue the company, though it seems that this has not changed the bank’s position on the matter.
While CELSA president Francesc Rubiralta said that the creditor funds "have never financed the company nor have they been interested in its strategic plan", the funds suggest that the only obstacle before the SEPI rescue plan are the economic interests of the Rubiralta family.
If the parties fail to reach an agreement before June 28, CELSA’s jobs and strategic plan will be at risk, since the SEPI fund expires on June 30.