Romanian steelmaker Liberty Galați faces a possible interruption to its electricity supply after utility Electrica declined to renew its contract over unpaid bills. The agreement is due to expire on October 31, and Liberty’s management has warned that a complete disconnection could disable critical industrial systems. Restoring power across the site could take up to 50 days, the company estimates.
Liberty’s restructuring administrator, Remus Borza, put the company’s debt to Electrica at about €5.9 million and the guarantees at approximately €7.8 million. Those figures are attributed to Borza and have not been independently confirmed by Electrica. On October 30, Galați prefect George Toderașc asked the Romanian government to identify urgent steps to prevent a supply interruption.
The case highlights the financial risks of supplying electricity to distressed industrial companies, which may need uninterrupted power to protect valuable equipment even as suppliers face mounting unpaid receivables and credit exposure. It also raises questions for electricity suppliers, industrial lenders and restructuring investors about counterparty credit limits, collateral, minimum-power requirements and funding essential consumption during corporate restructuring.
Supply arrangements and credit exposure
Liberty and Electrica signed their supply agreement in February 2026, and later extended it. Electrica has not agreed to another extension because of outstanding payment obligations, according to Romanian reporting. The steelworks has relied on short-term electricity procurement, but company representatives have warned that this cannot provide a permanent solution.
Local reporting says Transelectrica notified Liberty that it could request last-resort electricity supply for a limited period from November 1 to November 5, with E.ON Energie România designated to provide it. Such an arrangement would offer temporary protection, rather than a lasting substitute for a standard commercial supply contract. Its availability and implementation should not be taken as confirmation that the steelworks has secured uninterrupted power.
For companies in financial difficulty, electricity procurement can become harder as suppliers reassess creditworthiness and seek stronger payment guarantees. Suppliers face the risk of unpaid invoices as well as future procurement commitments made for customers. When volumes are large, a customer’s inability to pay can strain working capital and force the supplier to adjust its risk exposure.
For a distressed industrial consumer, however, losing electricity can cause damage well beyond the value of the unpaid bill. Power is needed for several systems that may have to remain operational even when steel production is reduced or suspended. These can include cooling equipment, pumps, ventilation, electrical protection, auxiliary systems and installations that require a controlled shutdown.
Risks to equipment and production
Liberty’s management has warned that a complete power cut could cause critical systems across the steelworks to fail within hours. The company estimates that restoring electricity across the industrial platform could take up to 50 days, reflecting the complexity of restarting interconnected equipment safely. This is a management estimate, not an independently verified restoration schedule.
The potential impact extends beyond an immediate loss of steel output. Equipment damage, preservation costs, delayed maintenance and extended commissioning could raise the financing needed to resume production. Liberty’s welded-pipe operation, which has been working on existing customer orders, could also be affected.
For a restructuring investor, there is a significant difference between acquiring a facility with its essential systems preserved and taking over one after a prolonged, uncontrolled shutdown. An interruption that damages critical equipment could lower asset value and make financial recovery more costly. These risks add to the potential consequences of a supply cut.
Guarantees and supplier risk
Borza said Liberty has accumulated unpaid obligations to Electrica of about 30 million Romanian lei, equivalent to €5.9 million. He put the value of the guarantees at around 40 million lei, or approximately €7.8 million. The relationship between the reported debt and guarantees raises questions about collateral enforceability, maturity, contractual coverage and the supplier’s ability to recover what it is owed.
The reported guarantees, despite exceeding the stated debt, do not establish that they are immediately payable or sufficient to cover all current and future exposure. Their actual value depends on their legal form, enforceability, duration and the obligations they secure. For suppliers, the central consideration is how much additional credit exposure they can accept without weakening commercial risk controls.
Restructuring managers, meanwhile, must work out how to fund minimum electricity needs while existing liabilities are being negotiated. These interests may conflict: a supplier can have legitimate reasons to avoid extending further unsecured credit, while an abrupt loss of power could destroy industrial value and reduce creditor recoveries. Addressing the issue may require a financing structure that preserves essential operations without shifting unlimited risk to the supplier.
Potential role for minimum-power contracts
The Liberty case points to a potential market for specialised electricity-continuity arrangements. These could separate the power needed for full commercial production from the smaller volume required to preserve equipment, maintain essential services and carry out safe shutdown procedures. A restructuring plan could specify the minimum technical load needed to protect an industrial installation during reduced production.
That load could be funded separately through arrangements involving lenders, investors, restructuring administrators or other legally authorised parties. Payments might be supported by dedicated deposits, guarantees or other credit-support mechanisms. The aim would be to protect industrial asset value while limiting the electricity supplier’s exposure.
Any such arrangements would need to comply with market rules, applicable credit requirements and the technical obligations of network and system operators. They would not amount to an unrestricted right to electricity without payment, and no dedicated minimum-power financing arrangement has been confirmed for Liberty Galați. The commercial significance is the potential to develop a more formal market for industrial preservation electricity, based on transparent contracts and independently established technical requirements.
Implications for energy-intensive industries
The risks highlighted by Liberty are relevant to steel, aluminium, cement, chemicals and other electricity-intensive industries in Serbia, Bosnia and Herzegovina, Montenegro, Bulgaria and North Macedonia. Large industrial sites often need auxiliary electrical systems to keep running even when their main production lines are stopped. In Serbia, the issue is particularly relevant to companies with substantial electrical equipment and technically complex restart procedures.
Banks financing industrial assets may need to assess whether electricity contracts remain enforceable during financial stress and whether enough liquidity is available to keep essential systems operating. Suppliers may need stronger procedures for assessing the credit risk of large industrial customers. Infrastructure owners and engineering advisers could also help establish minimum-load requirements and develop controlled shutdown and restart plans.
Potential commercial services include technical assessments, industrial electricity-continuity planning, collateral structuring and specialist energy-risk advice. These services become especially valuable when the failure of a standard supply agreement threatens the recoverable value of a major industrial facility. Electricity procurement therefore cannot be treated as a secondary operating expense in a heavy-industry restructuring.
Electricity continuity during restructuring
Liberty Galați’s immediate position depends on whether temporary or longer-term supply arrangements can be secured and whether its financial restructuring can fund essential operations. As of the latest reporting on October 31, the disconnection risk remained unresolved, and a completed shutdown had not been independently confirmed. The threatened interruption has shown how electricity may be necessary to preserve equipment, maintain safety and retain the possibility of future production.
For suppliers, the same electricity represents a contractual and credit exposure that must be controlled. The challenge for Southeast Europe’s industrial electricity market is to develop arrangements that reconcile those competing requirements. Industrial lenders, utilities and restructuring specialists may increasingly need dedicated mechanisms to fund essential consumption, preserve technical assets and avoid value destruction during financial distress.
