“Not to use euphemisms, Celsa was broke.” This is how emphatic this week the president of the steel giant, Rafael Villaseca, was in a meeting with the press about the financial situation inherited from the previous stage with the Rubiralta family as owners. The second European manufacturer of steel products, a strategic company for the Spanish economy, was a giant with feet of clay. “With the help of the new shareholders and creditors, the appropriate decisions have been made so that this company continues to be an industrial emblem of the country,” the former CEO of Gas Natural emphasized in his speech.
This second chance for Celsa does not extend to the founding family. A pioneering ruling by the Barcelona commercial courts removed the Rubiraltas from the property in September after failing to meet their financial obligations. The court ruling elevated a group of creditor funds as the new owners. Among the main shareholders, the DWS, Attestor, Golden Tree, Strategic Value Partners and Cross Ocean funds stand out. The company prefers not to reveal the stakes, but some sources suggest that the first two would be the reference partners in the capital.
Without the recapitalization of the debt, the company would have incurred a capital hole of 1,187 million euros and losses of 918 million in 2023. However, the inflow of funds allowed it to close the year with equity of 326 million, a net debt of 1,200 million and a net profit of 469 million (although the company estimates that, with the perimeter fully consolidated, this would fall to 202 million).
Pro forma turnover stood at 4,756 million euros, 22% less. The gross operating result (ebitda) reached 441 million, which represents a decline of 50%. “Last year, Celsa also suffered the consequences of a weak market,” commented CEO Jordi Cazorla, recruited for the position at the beginning of the year from the firm DS Smith. The executive trusts that this year the sector will give a truce. After two consecutive years of declining sales, the forecasts of the European employers’ association Eurofer are for growth of 5.6% in 2024 and 2.9% in 2025. Celsa begins a new stage at a favorable time to follow the dynamics of the market.
Among the factors that explain the hole in the balance sheet, loans worth 539 million granted to property companies of the Rubiralta family stand out. These loans became bad when the previous owners of the multinational declared these companies bankrupt. Villaseca acknowledged that the council could take legal action to recover the liability.
Celsa is an industrial giant with 120 work centers, seven steel mills, 12 rolling mills, 48 ??recycling plants and all types of auxiliary companies. It has a presence in Spain, France, the United Kingdom, Denmark, Finland, Norway, Poland, Sweden and Ireland and has clients in construction, shipbuilding, motor and energy. The workforce amounts to more than 10,000 employees. Villaseca pointed out that there are no plans to make job cuts, but it is clear that the group’s profile may change.
The company has commissioned the consulting firm Bain
The company is also exploring the possibility of divesting some of its international subsidiaries in Northern Europe, the United Kingdom and Poland. Precisely, these subsidiaries were the ones that received the most investment in capex last year, with an aggregate volume of 100 million euros. The multinational steel company has hired the investment bank Citi to address this issue. This is an option that the unions do not like at all, who described the movement as the “beginning of the plunder programmed by investment funds.” In their analysis, these subsidiaries generated 50% of the industrial holding company’s ebitda.
Another chapter to be resolved is the incorporation of a Spanish industrial partner with a 20% stake. Villaseca pointed out that it is still early to talk about it. With the company’s delicate financial situation, the group still has to greatly improve its income statement to generate interest in the market. Among the possible candidates, the market has speculated on the possibility of companies such as Sidenor, Megasa, Cristian Lay or Gonvarri entering.
