Celsa summarizes debt, financial situation

The investors who now manage Spain-based electric arc furnace (EAF) steelmaker Celsa Group say they spent 2023 focusing on “restoring its equity balance thanks to the recapitalization of debt [and] other accounting adjustments, with the recapitalization effort involving some 1.4 billion euros ($1.5 billion) on its balance sheet.

Celsa Group says its moves throughout 2023 enabled it to close the year with positive consolidated shareholders’ equity of 326 million euros ($350 million).

The company says it is Europe’s first low-emission circular steel producer with the largest circular supply chain in Europe. It recycles ferrous scrap to produce steel in EAFs, using what it says is the most sustainable and energy-efficient technology.

Celsa Group's operations consist of seven steel mills, 12 rolling mills and 48 scrap processing facilities in Spain, France, the United Kingdom, Denmark, Finland, Norway, Poland, Sweden and Ireland.

After an early-April meeting near its headquarters in Barcelona, Celsa Group board Chair Rafael Villaseca and CEO Jordi Cazorla offered the 2023 review as well as insight into the steelmaker’s plans for this year.

“Without the restructuring process, the company would have registered losses of 918 million euros ($986 million) in 2023, with a negative equity of [more than $1.1 billion] due to accounting cautions detected in previous audits,” the firm says regarding last year.

The company’s officers say the recapitalization made it possible to close the last financial year with positive equity and a consolidated annual profit after tax of 459 million euros ($493 million).

Citi was commissioned to carry out a valuation process for foreign subsidiaries with the aim of assessing possible asset rotation options.

European media outlets have reported Celsa Group recycled-content steel mills under consideration for divestiture include those in Norway, Poland and the United Kingdom.

The current management team is working with global consulting firm Bain & Co. on a new five-year strategic plan that likely would include any divestiture recommendations. “This plan will be aimed at generating value and boosting the group’s competitiveness and operational development, reinforcing its position as the leading producer of low-emission circular steel,” Celsa Group says.

Another result of the April Celsa meeting was the appointment of four independent board directors: Hilario Albarracín, Elena Guede, Juan José Nieto and Mario Longhi, a former CEO of the Pittsburgh-based United States Steel Corp.

In March, the company also hired new Chief Financial Officer Borja García-Alarcón.

Operationally, Celsa Group's output was 5.6 million metric tons of steel in 2023. “The finished product in 2023 contained 97.4 percent recycled material, and the goal is to achieve 98 percent circularity by 2030,” according to the company.