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Factbox: Steelmaker Celsa puts Spain’s new insolvency law to the test

Spain’s largest private industrial group, Celsa, is putting a new insolvency law to the test, with creditors and family owners unable to agree on how to restructure roughly 2.8 billion euros ($3.04 billion) of debt.

What we know so far:

What is CELSA?

Celsa Espaa, part of the Celsa Group, is an industrial steel group founded in 1967 by the Rubiralta family.

Headquartered in Barcelona, Celsa has 120 work centres across nine European countries and is present in seven Spanish regions and 13 provinces, predominantly in Cantabria, Catalonia, and the Basque Country.

The firm employs 4,500 people in Spain.


The COVID crisis affected Celsa’s business due to lockdowns and difficulty obtaining raw materials.

Like other steelmakers, Celsa was forced to make production cuts last year as energy prices soared after Russia’s invasion of Ukraine.

In June, Spain’s government authorised 550 million euros in state aid to Celsa, approved by the European Commission.

The help came in the form of a hybrid instrument worth 280.5 million euros called a “participatory loan” and a regular loan worth 269.5 million euros.

Its disbursement was subject to an agreement between creditors and the company, two sources with knowledge of the matter said.

On top of the state aid, the Rubiralta family also committed to undertaking a 50 million euro capital increase.

Battle with creditors

Holders of Celsa’s debt include GoldenTree Asset Management, Cross Ocean Partners, and Sculptor Investments, which all bought the debt at a discount, as well as Goldman Sachs (NYSE:GS), according to court documents.

Creditors initially refused to allow Celsa or its shareholders to use public money to repay outstanding debt at a discount and presented their own restructuring plan under Spain’s new law.

While Celsa shareholders are now open to the possibility of creditors taking some of the company’s equity, as long as the family owners retain control, the make-up of that split is a stumbling block, one of the sources and a third source said.


Celsa’s restructuring plan is the first big test of Spain’s new law, which allows debtors to make use of pre-insolvency mechanisms early and benefit from court protection when they expect to be unable to regularly meet debt obligations due within the next two years.

Creditors give debtors three months to come up with a plan to restructure their debt, but this time can be extended.

The new law divides creditors into classes. Creditors with the same place in the list of claims to be paid must be in the same class.

Creditors holding claims affected by restructuring plans must vote together by class, the general rule of thumb is that a majority of the classes must vote in favour of the plan for it to be approved.

With court approval, a restructuring plan could be made longer for different types of creditors.


Banks have agreed to extend by another six months a 525 million euro loan for Celsa to secure short-term liquidity to pay providers, the first two sources said.

As soon as the creditor classes are approved, the final restructuring plan will be presented. This plan will show how Celsa’s capital structure will look after the restructuring.

Lexaudit, the court-appointed consultancy firm specialising in restructuring and insolvency, will then assess whether the collateral—the assets used to guarantee the debt – covers the value of the debt.

Outstanding questions revolve around the set-up of a new company and on what terms the revolving debt is renewed to allow the steelmaker to service its debt.

($1 = 0.9180 euros)


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