The countdown has started to the restructuring of Greece’s steel industry, one of the country’s most overindebted sectors, with total arrears of 1.2 billion euros.
Last Thursday, Alvarez & Marsal sent its study for the industry’s restructuring to the creditor banks and Kathimerini understands it has proposed the closure of at least one production unit, the further reduction of operating expenses at other units, mergers, the entry of strategic investors to bring in capital and know-how, and a significant reduction of obligations so as to result in a sustainable industry.
The study’s objective is to make the new operating model internationally competitive, which can only be achieved through a government intervention to reduce energy costs. Otherwise, bank officials note, the industry is doomed to keep adding to its losses, which banks are unable to fund any longer.
Greek steel is of the same quality or in some cases better than that made elsewhere in Europe, but it is not competitive due to its huge energy costs owing to the high electricity and natural gas rates steelmakers pay. Of Greece’s five steel plants, only four are still operating, as the Hellenic Halyvourgia plant at Aspropyrgos has closed.