Celsa stumbles on the same loan debt | economy

Francesc Rubiralta did not show much aversion to borrowing when he was at Celsa, the second largest Spanish steel company. 17 years ago, he experienced firsthand how the family business group split in two when his uncle Jose Maria, dissatisfied with his father Francisco, bought the Finnish company Fundia for 123 million euros. Uncle…

Francesc Rubiralta did not show much aversion to borrowing when he was at Celsa, the second largest Spanish steel company. 17 years ago, he experienced firsthand how the family business group split in two when his uncle Jose Maria, dissatisfied with his father Francisco, bought the Finnish company Fundia for 123 million euros. Frances’ uncle opposed the move, believing it would mean too much debt, and his son-in-law, then 28, landed at the company after a training tour through consulting firms, accusing him of owning takeovers. .

The Celsa was already a benchmark in 2005. He took advantage of the consolidation of the sector in Spain to acquire smaller companies and made around 2.8 billion euros that year. But the takeover race was not over, and in the following years, the largest Spanish producer of long products for construction and a steel group with a major role in the production of wire rod for the construction industry were completed. Growth accelerated between 2002 and 2012. ArcelorMittal is not far ahead of itself today in Spain’s steel industry, although Francec, who has been the company’s chairman since his father’s death in 2010, has always argued that it is more a scrap metal recycling company than a steel company. , its raw material. Its turnover has risen to more than 6,000 million euros, it has branches in various European countries and employs 10,000 workers. But those parameters alone did not grow: the debt is today 3,000 million balls, the creditor banks escaped after various refinancings in a short period of time by applying a large discount (in some operations it is 70% and 80%). Forward. If they sell that debt, it is because they find it difficult to collect.

This week, the opportunistic funds that bought it starting in 2017 won the game in court after three years of discussions – or skirmishes – with the company’s management: they will own 100% of the company in exchange for a 1,300 million loan. The remaining debt, up to Rs 2.4 billion, can be recovered over five years. Rupiralda can only wait if the government refuses to authorize the takeover by the owners, opening another path full of uncertainty.

There is a certain pessimism about the all-or-nothing policy played by the family in Catalan business circles, which did not begin to consider the possibility of offering part of the capital in return for access to its creditors until earlier this year. A contract. By then it was too late: the funds knew that bankruptcy law reform had opened a window of opportunity to keep 100% of capital, and that if it didn’t go well, the game would continue. Everyone consulted repeats the same thing: the company is doing well (it had a gross operating profit of 867 million in 2022) but its financial planning failed and had to reduce liabilities. “If there was funding, it was because they saw that it was a good project,” says Jaime Alcina, president of the Association of Catalan Family Businesses, firmly.

Same conditions for funds

“I don’t know if Francesco Rupiralta made a mistake in his strategy, but he is like his father: a force of nature and a fighter who is dedicated day and night to the company,” says a manager in the steel industry. Yet Celsa’s president is vice-president of Spain’s employers’ association Unesid and a member of the Círculo de Economía committee, which he has not participated in for the past three months. The company declined to participate in this report.

The banks trust the “new owners” – as the report of the Ministry of Industry has already defined – and have already guaranteed the same credit policies for 525 million euros with monitoring every 15 days that the group had since November. “Why should the current managers do better and the finances worse? “They want to get the money back,” says a senior banker who has known the Rubiraltas for decades. The signing of Rafael Villaseca, the former CEO of Gas Natural Fenosa, to head the company is today understood as a guarantee of the company’s future: with managements Well-acquainted, with a long career in industrial companies, and not classified by the division of companies. The guarantees that the judge and administrations demand precisely are: the integrity of the business, the headquarters in Spain and the maintenance of employment.

The verdict is a painful blow to the family that had an industrial benchmark on its hands, and a visceral blow to the giant Catalan company, which sees how it loses its family DNA year after year. Since 2005, with the sale of Panrico by the Costafreda family, Catalan entrepreneurs have been undoing positions at an accelerated pace in recent years: from the Cirsa casino empire, to the cava producers Codorníu and Freixenet, to the auto parts manufacturer Ficosa or the wedding dress manufacturer Pronovias. A recent case is the Pastas Gallo case. The big difference with Celsa was precisely the insistence of Francesco Rupiralta not to give up part of the capital that ended up deciding the game.

The Generalitat’s Minister of Commerce, Roger Torrent, acknowledges the process of family capital exiting the industry: “There is a global dynamic from which it is currently very difficult to escape, but, of course, there are large family companies. They have become the arms of foreign capital, and many others have grown and established themselves as models of success.

Serious debts like Celsa’s, even without the seriousness of its judiciary, have forced changes in the financial board of directors or the replacement of top executives, as happened in listed companies Grifols or Cellnex.

Follow all the information economy Y Commercial Inside Facebook Y TwitterOr among us Seminal Newsletter