Czech steelmaker Liberty seeks 'path to profitability' in restart plan

PRAGUE (Reuters) - The largest Czech steel maker Liberty Ostrava said on Tuesday it aimed to ramp up production in the coming months, put the group on a "path to profitability", and repay creditors as it seeks a plan to battle depressed European markets.

The company, whose parent Liberty Steel is owned by commodities tycoon Sanjeev Gupta, won a court order in November protecting it from its energy supplier. The plant with annual capacity of 3.6 million metric tons and employing thousands has idled its last operating furnace since October.

It reiterated in its plan, presented on Tuesday, that it intended to restart the furnace in January and ramp up output after that, in line with an expected steel market recovery in Europe.

"The optimisation plan shows a path to profitability and an ability to pay back creditors aided by significant support from Liberty Steel Group and without the need for an injection of additional external funding," the company, based in the east of the Czech Republic, said.

It said the plan would explore bringing in strategic partners and selling non-production land and buildings. It also aimed to renegotiate with some creditors, including a major energy supplier.

Its energy supplier Tameh said this week it would stop supplying from Wednesday.

Czech media reported on Tuesday that a court had put Tameh in bankruptcy proceedings due to unpaid bills from Liberty Ostrava. A company spokesperson was not immediately available to comment.

Liberty Ostrava said its business remained solvent and would continue paying employees and serving customers.

"We believe this plan, which has been developed following a comprehensive review of our business and our markets, is the best way to achieve a sustainable future of the business," Ajay Aggarwal, Liberty's European President and chairman of Liberty Ostrava, said.

(Reporting by Jason Hovet; editing by David Evans)